Slow collapse of Chinese economy has begun – expert

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Despite official reports from the Chinese authorities about economic successes, things are not going well in the industrial and financial spheres of China. As the Western resource 19fortyfive.com writes, deflation and the negative processes associated with it are gaining momentum in the country.

China's producer price index, a measure of selling prices, fell year-on-year for the 26th straight month in November. The gross domestic product deflator, a broader measure of prices across the country, has been in negative territory for six calendar quarters, the longest this century.



In a situation of deflation, consumers prefer not to spend money, expecting an even greater fall in prices. This significantly reduces economic activity. A number of experts believe that real growth in China fluctuates around 0-1,5%. Chinese economist Gao Shanwen believes that the authorities are overestimating GDP figures, and the country's economic growth is within 2%.

China is also in the midst of a debt crisis linked to its bloated real estate sector. But debt-fueled stimulus has run its course. As a result of overspending, China's total government debt to GDP ratio is between 350% and 400%.

The Politburo announced the implementation of a moderately soft monetary policy policy, which will mean further growth of domestic debt.

The yuan is also currently falling. This is good for local exporters, but a weak yuan could push China's partners to introduce trade barriers.
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  1. borisvt
    borisvt
    0
    18 December 2024 13: 02
    ..deflation and the negative processes associated with it are gaining ground

    And deflation is no worse than inflation, if not better, especially for consumers! Of course, for modern economies with their unbridled government spending, this is nonsense, but it is nice to see such a rarity smile
    If, of course, the author has objectively confirmed information, which is not typical for the Chinese case
  2. spectr
    spectr
    +1
    18 December 2024 13: 36
    They'd better take care of their own collapse. 80% of their domestic economy is the service sector. And any inflation leads to the collapse of this sector. And recently they've had problems with rising prices. So, although it's not advertised, there are also layoffs in the US, as well as in Europe.
  3. Vladimir Tuzakov
    Vladimir Tuzakov
    0
    18 December 2024 20: 17
    Key phrase:

    As the Western resource 19fortyfive.com writes, deflation and the negative processes associated with it are gaining momentum in the country

    And what else can a hostile media write, only negativity. As it is in reality, a crisis is beginning in the world, especially since China is under various sanctions and pressure, only lies can be rosy today...
  4. Foe Pshekov
    Foe Pshekov
    0
    21 December 2024 15: 50
    we would have their problems ...
  5. Jacques sekavar
    Jacques sekavar
    0
    21 December 2024 19: 13
    There are economic problems in the US, EU, RF, and in China, and the main one is shadow banking, commercial banks lending to regional party activists, which undermines the leadership role of the CPC and the social system. Against this background, all other problems fade, especially since the economy is growing at the planned 5%, and the socialist modernization program is being successfully implemented.