Beautiful Virgin Islands

Wednesday, Jul 23, 2025

China's Economic Slowdown Could Have Ripple Effect Across World: Report

China's Economic Slowdown Could Have Ripple Effect Across World: Report

Productivity that determines the long-term growth rate has sunken sharply in the case of China, according to an author.
According to China's National Bureau of Statistics (NBS), the annual GDP growth of the country fell to 3 per cent, much below the 5.5 per cent official target in 2022 and its economic slowdown has the potential to generate ripple effects across the world, reported Financial Post.

The concerns and challenges facing China and the global economy were well articulated by Liu He, the vice-premier of the People's Republic of China, while speaking at the World Economic Forum at Davos 2023.

"Over the past five years, we have experienced all kinds of unexpected events, and witnessed profound changes in the world's political and economic landscape. Therefore, the theme of this year's Annual Meeting, 'Cooperation in a Fragmented World', cannot be more relevant," He said.

"The Covid-19 pandemic punctured China's growth saga. China's GDP growth was also slightly lower than forecasts published by the IMF in October 2022. IMF predictions expected a GDP growth rate of around 4.4 percent.USD 18 trillion in 2021 mainly due to a sharp rise of the dollar against RMB. This is the slowest growth of the Chinese economy since the 2.3 per cent registered in GDP in 1974," reported Financial Post.

Observers were already talking about China falling into the middle-income trap and now, evidence has come to light that the country is finding it hard to keep its miracle of sustained higher growth rates anywhere closer to 10 per cent or more recorded during the late 1980s and the whole of 1990's.

Kim Byung-yeon, author and a professor of economics and head of the Institute for Future Strategy at Seoul National University succinctly argued that "the Chinese economy is slipping into the middle-income-country trap."

According to Kim, productivity that determines the long-term growth rate has sunken sharply in the case of China.

The downward trend has deepened since 2014. China's fast growth over the past 15 years stemmed largely from the infrastructure investment to build factories, housing and roads - and less from structural reform and innovation. Extensive growth led by capital and labor input is not sustainable, reported Financial Post.

The sharp decline in the Chinese GDP growth in 2022 was blamed on a host of factors mainly China shutting itself from the outside world due to the 'Zero Covid' policy. The slow pace was blamed mainly on the strictly 'Zero Covid' policy, leading to periodic lockdowns and the ruling Communist Party's crackdown on big industrial firms besides the lingering real estate crisis.

The most disturbing fact that comes out from the NBS data is that China, the so called 'manufacturing hub' of the world recorded a very feeble growth in industrial output at 3.6 per cent year-on-year in 2022 and even feebler at 1.3 per cent in the month of December. Zhu Hong, a senior NBS statistician, highlighted a rebound in COVID outbreaks and lackluster demand in November that curbed industrial production and placed increasing pressure on Chinese businesses.

According to him, the factors that weighed on slow industrial growth included a squeeze in profits both from anti-virus curbs in big manufacturing hubs such as Guangzhou and Zhengzhou, and from the persistent weight of a protracted property crisis and slowing exports, reported Financial Post.

NBS data in November 22 showed that profits fell for 21 of 41 major industrial sectors, with the ferrous metals smelting and pressing industry suffering the steepest decline, at 94.5 per cent. That compares with a 92.7 per cent fall for the first 10 months.

Another reason for the industrial slowdown is that many Chinese companies are also facing western sanctions including those in the US, especially against the Chinese tech companies which allegedly breach data security and steal patents.

FBI Director Christopher Wray said at the World Economic Forum (WEF) that he was 'deeply concerned' about the Chinese government's artificial intelligence program, asserting that it was "not constrained by the rule of law."
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×