At the beginning of 2023, there was great relief in the People’s Republic: after three whole years of heavy Corona measures, normality returned. A so-called ‘revenge consumption’ was the result. However, the flowering did not last long…
Because now, twelve months later, the Chinese economy is once again confronted with uncertainties. The initial joy of regaining freedom after the pandemic gave way to other concerns. The Chinese middle class is particularly concerned about the ongoing real estate crisis. Your savings are invested in apartments whose value has only increased for a long time. Now prices are falling.
The turbulence among major real estate developers in China, who can no longer pay off their debts, is creating uncertainty. Evergrande alone, the country’s largest developer, has racked up debts of more than $300 billion. The result: many people keep their money together. The engine of the second-largest economy is sputtering – and not much is likely to change in the new year.
Government measures are not enough
Authorities have taken measures to stimulate the housing market, including lowering minimum requirements for home buyers and lowering mortgage rates in some cities. Despite these efforts, there is little sign of recovery. “The government has taken measures, but they are not strong enough,” said Liu Shengjun, chief analyst at Chinese think tank Guoshi Financial Reform.
Precarious situation for the young generation
“For the economy to improve significantly in 2024, greater consumption is essential,” said Max Zenglein, chief economist at the Merics China Institute in Berlin. But regaining trust will not be easy in this environment. There is unrest, especially among young Chinese. Companies that are uneasy due to the economic situation are hiring fewer people. At the same time, a record number of university graduates are entering the labor market. In the summer, youth unemployment peaked at over 20 percent. Beijing then simply abolished the relevant statistics.
Trade dispute with the US
As if its domestic problems weren’t enough, Beijing faces geopolitical challenges. The trade conflict with the US is still raging, also over high technologies such as computer chips. The West is increasingly seen as a threat in Beijing.
Source: Krone
I am Wallace Jones, an experienced journalist. I specialize in writing for the world section of Today Times Live. With over a decade of experience, I have developed an eye for detail when it comes to reporting on local and global stories. My passion lies in uncovering the truth through my investigative skills and creating thought-provoking content that resonates with readers worldwide.
