China Economy Collapse: For year’s China has been the world’s factory; relying on low manufacturing cost to make goods sold worldwide. More than 20 years of record-breaking growth has propelled China from communism to consumerism but now the Chinese economy at lowest to 25-year low, and the slowdown is affecting many other economies worldwide.
Commodity exporters who rely on China as buyers for years are now also struggling. Analysts say a slowdown is navigable, given how much the Chinese economy has grown in recent years, they say rapid growth is unsustainable, and a reset is needed.
In an interview Bank of China analyst Zhou Jingtong said “China is indeed in a moment of transferring from old to new. Traditional industries are big in size while emerging industries are smaller, so even these are growing fast emerging industries cannot make up the traditional industries to slow down. So, the overall economy is facing the pressure”
China’s slower growth was being expect, already analysts are predicting the economy to cool further this year and even government measures such as increasing, expanding and cutting interest rates aren’t expected to help much.
Chinese government leaders are encouraging everyone to spend more hoping to shift the economy export dependent to a more sustainable consumer-driven model. Some encouraging data emerged on Tuesday; retail expanding even though lower than expected still grew by double digits and the automotive industry if forecast to grow. Here is an article which explains what’s happening in China Stock Market and Economy.
China Economy Vs. Indian Economy GDP Per Capita in the years 1950 – 2010
In an interview Zhang Yong, Beijing Electric Vehicle Marketing told that ‘Auto sales growth is lower than the GDP growth but the industry at whole is doing all right because the consumers are going to upgrade their cars. Cars prices are higher because better cars are coming to the market, so the entire market is developing fast’.
The government is already undertaking structural reforms, slowing changing the centrally planned economy to a market-driven one that will take time. For now, the China and countries that depend on Chinese demand for exports will have to put up for slower Chinese growth.