Among other things, the country has problems with a shrinking population and an unstable real estate market, which slows down growth.
Despite government support measures, uncertainty is high, especially with global risks such as trade conflicts and wars in the Middle East and Ukraine.
The market was not impressed by China’s stimulus
Most recently, China’s leadership unveiled a stimulus package to refinance the costly loans burdening the country’s local governments. A measure that the market did not see as sufficient to reverse China’s negative trend.
Read also: The war that China is already winning. Today’s PS
Minister of Finance Lan Fo’an called the plan an important decision taking into account both international and domestic development environments as well as the need for a stable economy and public finances. The plan is also expected to support economic development at the local level.
IMF:s varning
In connection with the IMF correcting its forecast for the future global economy, it was believed that developments in China play a major role in the outcome.
“The latest government stimulus may provide some upside, but the third quarter has gone poorly. We see a tension between the weak performance of China’s economy and the need for continued support. Will the supports be sufficient? It remains unclear,” said the IMF’s chief economist Pierre-Olivier Gourinchas in a statement on the world economy
Other factors at play are the two painful wars raging, the shift in US power and the expected escalation of the trade war between the US and the rest of the world.
The clouds of worry are certainly gathering, but as Dagens PS writer Edvard Lundkvist says in the linked video – the world has seen growth despite geopolitical problems for several years in a row.
See more in the player above.
Read also: “It’s the economy, stupid” – the discontent that changes everything. Real time
