Economy of China is in big trouble what exactly went wrong by Xi Jinping Why the great crisis came in China after 40 years, is the debt crisis responsible, know where the mistake happened?
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real estate sector kangal
Recently, there was a historic decline in the Chinese currency Yuan. Growth has stalled and consumer prices are falling, real estate is in deep trouble and exports have plummeted. This crisis was increasing that suddenly there was an increase in unemployment among the youth. The unemployment crisis has deepened to such an extent that the Chinese government has even stopped releasing statistics. China’s economy is in trouble since April this year. Country Garden, the country’s largest real estate firm, and Zhongrong Trust, which was the top trust, completely defaulted.
biggest debt crisis
One report said that Country Garden did not pay interest on two US dollar bonds. This created fear among investors and brought back memories of Evergrande. This firm also did not repay the loan in the year 2021 and since then the real estate was in trouble. Evergrande is still undergoing debt restructuring and Country Garden’s troubles loom large as the Chinese economy weakens. Beijing has introduced several supportive measures to revive the real estate market. But now even strong players are on the verge of bankruptcy.
The country’s $2.9 trillion investment trust industry has also come under fire due to non-payment of loans by property developers. Another major concern is local government debt. It is the debt that has increased to a great extent because of the decline in property purchases. Due to non-sale of the property, the revenue received from the land kept decreasing. The sharp drop in revenue and the cost impact of the pandemic’s lockdown have escalated.
dwindling population
China is facing some long-term challenges. Prominent among these challenges are the population crisis and strained relations with major rivals such as the US and Europe. According to a recent report by government website ZiMein.com, the country’s total fertility rate has declined to 1.09 from 1.30 last year. This means that China’s fertility rate is now lower than that of Japan, which has long been known for its aging population. Earlier this year, China released figures that showed its population declined last year for the first time in six decades. A research report by Moody’s Investors Service said, ‘China’s aging population presents significant challenges to its economic growth prospects.’
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