Data pointing to the negative side of the Chinese economy is increasing

China’s economic problems are increasing. More and more negative news comes from the country’s economy every week. The latest data showed that the country’s manufacturing activity contracted for the fifth month in a row. Economists lowered their 2023 and 2024 growth forecasts for China.

second largest economy in the world Chinese The negatives continue to increase.

While data in the country’s construction and industrial sectors point to deterioration, foreigners in the asset markets continue to sell their stocks.

Economists remain pessimistic about China’s economic prospects. Forecasters surveyed by Bloomberg lowered their growth expectations for both 2023 and 2024.

MANUFACTURING SECTOR SHUT DOWN, FOREIGN SALES INCREASED STRONGLY

China’s manufacturing sector also contracted for the fifth consecutive year in August. The country’s manufacturing purchasing managers index (PMI) remained below the 50 level, indicating contraction. Manufacturing PMI was 49.7 in August.

In addition, foreign sales in Chinese markets increased sharply. Foreigners sold a record $12 billion in Chinese stocks in August amid concerns about slowing growth in the Chinese economy and the worsening crisis in the country’s real estate sector.

On the other hand, Chinese builders dollar The inability to pay its debts is also seen as a sign that the country’s real estate crisis, which led to the collapse of 53 companies in two years, will worsen.

REAL ESTATE CRISIS CONTINUES

Investment in the real estate sector fell 7.9 percent in the first half of this year, according to official data. The industry as a whole shrank in the last quarter and continued its contraction trend since 2021.

Country Garden Holdings, once China’s largest developer by sales, could be the next domino if it fails to make up for the two missed bond coupons on August 7 by the end of the 30-day grace period. The company reported a loss of $6.7 billion in the first half of the year alone.

The real estate sector accounts for about 30 percent of the country’s total production. The downsides faced by the industry include heavy debt loads and slowing demand for new properties. This causes the growth to come much lower than expected.

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