BLUF
China's rate of growth seems to be falling. Despite the opaque nature of Chinese economic reports, it looks as if China's self-imposed COVID-19 lockdowns are seriously affecting economic growth.Summary
This article makes the following points:
- Unprecedented economic growth has enabled China to become a global economic, political and military powerhouse.
- China's current strategies to control COVID-19 by forcing major financial and manufacturing centres into full or partial lockdowns have affected economic growth.
- China's Gross Domestic Product (GDP) has fallen by 2.6% from the previous quarter.
- GDP fall was worse than expected.
- However, unemployment fell to 3.5%, and retail sales outperformed expectations.
- Many analysts do not expect a quick economic recovery for China as the government continues with its strict zero-Covid approach to slowing the spread of the coronavirus.
- China's financial woes are further exacerbated by the collapse of China's once booming property market.
- Governments use GDP to guide decisions on spending, and in China's case, it will be interesting to see whether China's current slump is likely to effect military expenditure.
References
Recent Runway Posts related to this topic:
- China’s Crisis of Confidence – TheRunway (airforce.gov.au)
- China is a Paper Dragon – TheRunway (airforce.gov.au)
- China's economy is cooling rapidly and Australia could feel the chill – TheRunway (airforce.gov.au)
- China’s birth rate has hit a record low. That could shake the world economy. – TheRunway (airforce.gov.au)
- Coronavirus: China Wants to be Saviour of the World – TheRunway (airforce.gov.au)
- China could end up debt-trapping itself with its $2.3 trillion gamble to revive its economy – TheRunway (airforce.gov.au)
References from the Web :
- JAN 22 China’s “common prosperity” is a Catch-22. Lowy Institute
- MAY 22 There’s a growing sense of panic in China. Sydney Morning Herald
- JUN 22 VIDEO: China's economy is headed for a crash, warns analyst. ABC
