This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. March Learn how and when to remove this template message Over the years, large subsidies were built into the price structure of certain commodities and these subsidies grew substantially in the late s and s.
What's really going on with China's economy? But how much trouble is it in? The recent weakness comes as the country is fighting a trade war with the United States. President Donald Trump's top economic adviser, Larry Kudlow, said this month that the Chinese economy "looks terrible" while the US economy is "crushing it.
Its huge manufacturing industries suck in parts and materials from countries around the world, fashioning them into goods for Economics in china or for sale in China.
Growth slowdown China is one of the world's fastest growing major economies — it expanded 6. But it has started to lose steam this year, and signs of further weakness are multiplying. Official data for July showed a slowdown in investment, factory production and retail sales.
The trade war with the United States is also a worry, but not the biggest.
Instead, we expect the economy to weaken mainly due to domestic headwinds caused by slower credit growth," Chang Liu, China economist at research firm Capital Economics, wrote in a note to clients this week. But some experts think that slowdown fears have been overblown. Douglas Morton, head of Asia research at brokerage Northern Trust Capital Markets, pointed out that some indicators like demand for oil and the property market are still strong.
Market slump China's stock market and its currency have been pummeled by investors concerned about the health of the country's economy and the impact of the trade war.
That decline is partly down to the US Federal Reserve raising interest rates, which makes it more attractive for investors to hold assets in US dollars and sell those in other currencies.
Even though a weaker yuan makes Chinese exports cheaper, helping offset the impact of US tariffs, analysts suggest that Beijing is more concerned with propping up the currency to avoid a steep plunge that could spook investors. Debt burden China's slowdown comes as Beijing is trying to tackle the country's heavy debt burdena legacy of its huge stimulus programs in the wake of the global financial crisis.
The biggest worries surround the alarmingly high levels of debt held by companies, especially China's bloated state-owned enterprises. President Xi Jinping and other top officials have called for China's financial system to cut down on riskier lending, a campaign often referred to as "deleveraging.
But analysts worry that a slowdown in lending will weigh on the economy. Protests erupt as thousands in China lose life savings Economic stimulus China has been looking for ways to pump up the economy as growth slips.
Beijing has announced a range of measures including tax cuts, infrastructure spending and new loans to business. The government said the moves are intended to help China cope with "an uncertain external environment. But the Chinese government insists it has no plans to go on a spending binge the way it did in the aftermath of the financial crisis.Sep 19, · World news about business and economy in China.
The Economist offers authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them. Watch video · China’s banks extended a record trillion yuan ($ trillion) in loans in as the government encouraged credit-fueled stimulus to meet its economic growth target.
Components of China's Economy China built its economic growth on low-cost exports of machinery and equipment. Massive government spending went into state-owned companies to fuel those exports.
These state-owned companies are less profitable than private firms. They return only percent on assets compared to percent for private companies.
China has had a remarkable period of rapid growth shifting from a centrally planned to a market based economy. Today, China is an upper middle-income country that has complex development needs, where the Bank continues to play an important development role.
Nov 23, · The Economist offers authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them.