CHINA Economy in Desperate Trouble

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The Chinese economy is facing a significant slowdown, with the country’s growth rate expected to fall short of its 5% target for 2024. The Chinese Central Bank has introduced a stimulus package to try to boost the economy, targeting banks and the property sector. The package includes measures such as reducing the reserve ratio for big banks, cutting the cost of borrowing for existing borrowers, and reducing the deposit requirement for buying a second home from 25% to 15%. The banks will now be able to release more cash, which will be used for lending and stimulating economic growth. Additionally, the government has introduced a 100% guarantee for local authorities to buy up properties in the secondary market and rent them out, in an effort to stimulate the property market.

However, the measures may not be enough to fix the problems facing China’s economy, which is plagued by a significant decline in the property sector and a slowdown in industrial output. The country’s retail sales are also falling, with a year-on-year decline of 1.8% in August, the largest decline since 2012. The Chinese economy is heavily reliant on export, but with global commodity prices increasing, the situation is expected to worsen. The article concludes that the stimulus package may not be enough to fix the problems facing China’s economy, and the country may struggle to achieve its 5% growth target for 2024, which could even lead to a recession.

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