Arab Press

بالشعب و للشعب
Tuesday, Mar 19, 2024

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

Arab Press
0:00
0:00
Close
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
PM Modi Announces Opening Of New CBSE Office In Dubai
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Facebook and Instagram Ban Iran's Supreme Leader
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
The Saudi Kingdom's Ultimatum to Israel: A Win-Win Peace with Saudi Arabia and the Arab World, or a Lose-Lose Continued Occupation and Endless Conflict
Biden condemns anti-Arab hate after WSJ opinion piece calls Dearborn ‘jihad capital’
Turkey Releases Seven Hostages Captured by Pro-Gaza Gunman
Arab Parliament Commends Women's Contributions to Societal Development
British and Hungarian Foreign Ministers visited Lebanese leaders to stress the importance of enacting UN Resolution 1701
Yemen's Houthis Say They Targeted British Merchant Vessel In Red Sea
Donald Trump Nominated for Nobel Peace Prize for 'Historic' Middle East Policy
US lawmakers approve F-16 jet sale to Turkey following NATO expansion support
Saudi Arabia Climbs 25 Places in World Bank's National Statistics Indicator
Tourism Growth in Saudi Arabia Fuels Advancements in the Hospitality Industry," Says Rotana Official
Houthi Rebels Request Departure of UN Staff from Yemen, Including US and UK Personnel, within a Month
Modi Inaugurates Hindu Temple on Site of Demolished Mosque in India
Over 25,000 Deaths in Gaza Amid Israeli Offensive
Escalating Clashes in Gaza as Israel Distributes Leaflets to Assist in Locating Hostages
Turkey's First Astronaut Set to Launch for International Space Station Today
Head of Palestinian Investment Fund Warns More People May Die of Hunger Than War in Gaza
Palestinian Envoy Criticizes UK for Alleged 'Double Standards' in Policies Toward Israel
Morocco to Lead UN Human Rights Council in 2024
Is artificial intelligence the solution to cyber security threats?
Egypt has been identified as the leading military force among Arab nations and ranks 15th globally
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Iranian Nobel Laureate Narges Mohammadi Receives Additional Prison Sentence
"Gazans Urge Israeli Forces to Target Hamas in Leaked Audio"
Biden States US and UK Airstrikes on Houthis Were a 'Defensive Action
Large Pro-Palestine Rally in London as Gaza Conflict Hits Day 100
South Africa Urges World Court to Halt Israeli Actions in Gaza
×