Read about China’s struggle to overcome reduced exports and declining consumer spending, leading to a 20-point government plan to stimulate domestic demand. Get insights into the country’s economic challenges and potential solutions.
INVC NEWS
Beijing : China, the country with the world’s second largest economy, has again suffered a setback on the economic front. Factory activities in the country again declined in July. Factory work in China declined for the fourth month in a row. China’s economy is unable to get out of the slowdown, and there has been a huge decrease in exports. The Chinese government has announced new measures to boost the economy.
At the same time, America and many western countries have started taking measures to reduce dependence on China. Many companies of these countries are looking for a place in other countries including India. Due to this there has been a decrease in production in the country. The official Manufacturing Purchasing Index (PMI) released on Monday stood at 49.3. If it remains less than 50, then it is considered to be in contraction.
However, the PMI in July was marginally better than in June. The country’s PMI was 49.0 in June. However, according to Zhao Qingde of the National Bureau of Statistics (NBS), the PMI is gradually improving. The Chinese government is struggling to get its growth back on track. The biggest reason for this is that there has been a huge decrease in consumer spending in the country. The non-manufacturing PMI in the country also fell to 51.5 in July from 53.2 in June. It indicates business sentiment in the services and construction sectors. It is clear that there has also been a decrease in capital market services and real estate activities in China.
Recently, China has faced disappointment from all sides on the economic front. China’s economy grew at a pace of 6.3 percent in the second quarter, while economists were expecting it to be 7.1 percent. China is in dire straits due to sluggish consumption, crisis in the real estate sector and fears of deflation. Economic expert Larry Hu says that China’s situation is reminiscent of Japan where a situation of stagnation had arisen for many years. China has long been considered the workshop of the world. The country is heavily dependent on exports. But recently there has been a huge decline in its exports. Due to the risk of recession and rising inflation in America and Europe, the demand for Chinese goods is decreasing worldwide.
Along with this, the decrease in demand is the biggest challenge for China’s manufacturers. To get the country out of it, the government has announced new measures. On Monday, the government announced a 20-point plan to increase consumption.
