CHINA Economy IMPLODING – Exports Collapse, Property Price Crash, Imports & Factory Prices Down

Video Summary

China’s economy, despite initial reports of a strong start to the year, is actually facing significant challenges. The 5.3% GDP growth in the first quarter of 2024 may look promising at first glance, but there are worrying signs beneath the surface. One of the main drivers of this growth was government support for industrial production, with a massive influx of capital to boost GDP. However, this stimulus has been switched off, and industrial production has fallen sharply in March.

Exports, a crucial part of China’s economy, are also down 7.5% year-on-year, suggesting a lack of demand for Chinese goods. Imports, which account for a significant portion of China’s economy, are also down 1.9%. This decrease in imports is particularly concerning, as it indicates that manufacturers in China are not gearing up for a strong second quarter.

In addition, retail sales have fallen in every month since October, adding to the country’s economic woes. Inflation is also evaporating, and there is a strong possibility of a deflationary cycle, which would further complicate China’s economic situation.

The property sector, which accounts for 25% of GDP, is also in dire straits, with new home prices falling at their fastest rate in almost nine years. Developers are struggling to find buyers and are being forced to slash prices to make sales, leading to a significant decline in profits.

The Chinese government will need to take swift action to address these challenges and prevent a slowdown in the second quarter. If not, it is likely that the country’s GDP growth will fall short of its 5% target, with potential knock-on effects for the global economy.

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