Is there really a 'threat' looming over China's economy? These are the 6 big reasons for concern

China's economic power is weakening since Corona. Now its economy is being feared to be in trouble. Is the condition of China really that bad?

The world's second largest economy i.e. China is not taking the name of its difficulties. Before Corona, the sting of China's economic power was ringing everywhere. Many countries were getting buried under the burden of its debt. China's 'Belt and Road' Initiative had put even the biggest superpowers of the world in a quandary. She is now doing a long struggle after Corona. Has China's economic condition really become so battered?

There are many reasons for the crisis of China's economy. This includes boycotting China globally after Corona. On the other hand, reasons like China not clarifying the situation regarding Corona figures, coming of Corona wave one after the other, hiding Corona figures from the world have also proved fatal for its economy.

6 reasons for China's concern

China's economic crisis is deepening. There are 6 main reasons for this.

Deflation: Most of the world's economies are troubled by inflation. China's position is opposite in this matter. Here the prices of things are decreasing instead of increasing, that is, the economy is in deflation mode. This is a direct indication of decreasing purchasing power of the people and decreasing demand.

Unemployment: The second problem of China's economy is rising unemployment. According to the last government statistics, the level of unemployment has reached 21 percent, the situation is that the government has now stopped releasing the statistics related to employment.

Destruction of real estate sector: The real estate sector of any country works to improve the employment situation. China has invested heavily in real estate for rapid development, but now its buyers are not being found even after searching. 'Ghost Cities' have been formed in many cities of China. The condition of the housing sector is that about 40 percent of China's big developers are unable to pay their investors. Even the Chinese government has not yet taken any concrete steps for this.

Falling Yuan: The condition of China's currency 'Yuan' is also very bad. In the past, it went to the lowest level in the last 16 years. In the last one year, it has lost 7 percent against the dollar. People of China are increasing investment in Hong Kong to save their money. Hong Kong companies have seen an increase of 28 times in the insurance policies made in the mainland of China in the last 3 months.

Economic Slowdown: Decreased employment and falling purchasing power of people has also given a blow to China's economic growth. In the first half of 2023, China's growth has been only around 5 percent. On the other hand, the debt burden on China is increasing. It has become more than 300% of its GDP.

Outgoing Industry: After Corona, the world started boycotting China. The result of this was that many companies of the world started looking outside China not only for their market but also for their business base. Manufacturing units from China started shifting to countries like India, Bangladesh, Vietnam and Philippines. This has presented a challenge to China's economy.