FT News Briefing China’s economic slump
5 snips
Jul 18, 2023 China's economy is grappling with serious challenges, including high youth unemployment and a struggling property sector. The discussion highlights the contrast between China's limited stimulus measures and the more proactive approaches seen in the West. Meanwhile, Ford's drastic price cuts for electric trucks stir concern among investors. Additionally, BlackRock's move to give retail investors a bigger say in corporate governance sparks debate about the future of shareholder democracy.
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China's Economic Woes
- China's economy is struggling with slow growth, high youth unemployment, and a weak property sector.
- These problems are exacerbated by weakening exports and the lingering effects of COVID policies.
China's Consumption Problem
- China's domestic consumption remains weak due to the government's restrained approach to pandemic stimulus.
- Unlike Western economies, China's support primarily targeted businesses, impacting consumer confidence and spending.
Deflation Risk in China
- China faces deflation risk due to low consumer spending.
- This discourages purchases and worsens the debt situation of real estate developers.