China’s economy ‘bleak’, will see no growth, new report

Chinese President Xi Jinping attends in this handout photo released by the Uzbek Foreign Ministry … [+] Shanghai Cooperation Organization (SCO) summit in Samarkand, Uzbekistan, Friday, September 16, 2022. (Press Service of the President of Uzbekistan via `)

Uzbek Ministry of Foreign Affairs

Communist China under Prime Minister Xi Jinping is rapidly withering away.

The economy, which has been under pressure so far this year, is likely to worsen, according to a recent report from London-based consultancy Capital Economics.

Capital begins with the following sharp assessment of the situation:

• “Financial focus on a generational increase in inflation in advanced economies diverts attention away from a generational slowdown in China, which is arguably of much greater significance to the long-term global outlook.”

In other words, ignore China’s economic deterioration at your peril.

We already know that China’s steel production fell 5.7% in the year to August, according to the World Steel Association. This country has long been the world’s largest steel producer, so the decline is significant on a global scale.

Worse, only two of the world’s top producers underperformed over the same period: Russia and Turkey. Both are economic basket cases.

The hits keep coming. Exports from Korea to China fell in the first three weeks of September, the Capital report said. At the same time, Korean exports to the US increased.

• “This could be a sign that global demand for consumer goods, which China produces, is increasing – and for which Korea provides inputs earlier in the production chain – becomes softer“, says the Capital report. my emphasis.

Simply put, retail customers are retreating worldwide, and it’s already hurting China.

Monthly data for August also shows falling retail sales in China and Capital expects further declines in September.

When the experts sum all of this up, the outlook is bleak.

• “We recently lowered our forecast for this year’s officially reported GDP growth rate to 3% from 4% – the government’s target of 5.5% set in March was quietly abandoned – but in reality we don’t expect the Chinese economy to grow at all. ”

Put another way, China’s growth under Xi is likely to have dropped to zero on consistent double-digit gains.

It’s not the kind of accomplishment most leaders want.