An Economic Disaster May Have Just Hit China

According to The Epoch Times, China’s economy is beginning to show signs of faltering in October as retail sales fell for the first time in five months and factory output grew at a slower-than-expected rate.

During the month of October, retail sales in China fell by 0.5 percent after rising by 2.5 percent in September, marking the first decline in retail sales since May when it fell by 6.7 percent. Meanwhile, China’s industrial production only expanded by 5 percent from last year, less than the 5.2 percent growth expected.

In September, industrial production expanded by 6.3 percent, the fastest growth rate in seven months. China’s economy has been dealing with a property downturn and the ongoing COVID restrictions that have further dampened its economy. Last month, COVID outbreaks expanded throughout mainland China, disrupting many sectors, including the restaurant industry.

During a press conference, National Bureau of Statistics spokesman Fu Linghui admitted that China’s COVID containment policies were placing enormous pressure on the country’s economy.

China’s Retail Sales Slide Into Negative Territory as Economy Suffers Broad Slowdown (theepochtimes.com)

On top of that, shrinking demand, supply disruptions, and weakening expectations have added more pressure on economic operations, Fu said. Bloomberg’s China economist Eric Zhu reported that China’s Zero COVID policy and the sinking property market “have made the recovery increasingly vulnerable, especially now that exports are contracting.”

Zhu reported that China’s recent policy shifts are “unlikely to turn the tide” any time soon.

The stress on China’s property sector is due to Beijing’s attempt to curtail excessive borrowing. Earlier this month, financial regulators unveiled a 16-point plan geared toward rescuing the property sector.

Property developers will now be permitted to access pre-sale housing funds, a move that is expected to ease the industry’s liquidity crunch.

In the annual report from the American Chamber of Commerce in Shanghai last month, only 55percent of companies expressed optimism or slight optimism about the 5-year business outlook in China, a 23-point decline from last year’s report.