The data from the Chinese economy is much worse than predicted. The Middle Kingdom is particularly affected by the change that has occurred in global trade after the COVID-19 pandemic.
The Chinese economy has rebounded strongly after breaking with the “zero covid” policy, which, long after the rest of the world is operating normally, managed to introduce sudden lockdowns in some factories. However, the rebound did not last very long, and the current situation is very bleak.
China is feeling the effects of the pandemic
For the third month in a row, the Chinese economy has seen major declines in exports and imports. China’s trade is feeling the effects of a global change in thinking about production and supply chains. It seems that China has ceased to be the “factory of the world” and the existing rules of the economy are no longer working before our eyes.
According to data provided by the Chinese statistical office, exports in July fell by a staggering 14.5 percent. compared to the same period in 2022. Data on imports are almost as bad, falling by 12.4%.
According to economists, the third such a bad month in a row already suggests that China’s economic growth will slow down more than expected this year.
Power cannot stimulate the economy
China found itself in a very unusual situation. On the one hand, there are a lot of goods on the market, which are the result of the slowdown in trade during the lockdowns. This results in much lower inflation than in the rest of the world. On the other hand, due to the housing market crisis and rising unemployment, the authorities cannot stimulate the market to develop.
Another huge problem is the data on exports to the United States, which is the largest market that buys goods from China. According to the presented calculations, sales of products to the USA fell by as much as 23.1% in July, which is almost a quarter lower than a year ago.