All articles tagged with #domestic consumption
China's economy experienced its slowest growth in a year during Q3 despite a surge in exports, with weak domestic investment, industrial output, and retail sales indicating underlying fragility. The upcoming party meeting may focus on rebalancing the economy towards domestic consumption amid external pressures like US trade restrictions. Global economic indicators and policy decisions across major regions are also closely watched.
China's Communist Party leaders have prioritized boosting domestic consumption as a key economic strategy, pledging to increase the fiscal deficit and issue more special bonds. At the Central Economic Work Conference, they also discussed lowering interest rates and reducing bank reserve requirements. The focus on domestic demand comes amid concerns over deflation and external trade challenges, particularly with potential U.S. tariffs. However, the lack of detailed measures has disappointed investors, who are cautious about the effectiveness of these policies in stimulating the economy.
China's economy shows signs of stabilization, driven primarily by its export sector, while domestic consumption remains weak due to a property market slump. This comes as the global economy anticipates potential impacts from policies associated with former U.S. President Donald Trump.
China's ageing population, coupled with a record low birth rate and a wave of COVID-19 deaths, poses a severe challenge to the economy's long-term growth prospects, threatening key policy goals of boosting domestic consumption and reining in debt. With a large demographic group set to exit the labor pool and strain on the pension system, China faces structural imbalances and a potential humanitarian catastrophe. The country's low retirement age and declining birth rate are expected to impact domestic consumption, property sector, and innovation, leading to increased reliance on exports and slower productivity improvement.
China's exports fell by 14.5% in July compared to the previous year, while imports fell by 12.4%, indicating weaker production and lower domestic demand. This decline in trade highlights the need for Beijing to boost domestic consumption to offset falling global demand and achieve its 2023 growth target.
Chinese stocks surged as Beijing announced plans to implement additional measures to boost the country's struggling economy. The Hang Seng Index in Hong Kong rose over 3%, while the ChiNext and Shanghai Composite Index also experienced gains. Chinese property developers, including Country Garden and Longfor, saw significant increases in their stock prices. The rebound comes after Chinese real estate stocks plummeted due to concerns over debt levels. China's top leaders met on Monday and pledged to enhance policy support to stimulate domestic consumption, which has been slower to recover than anticipated. The leaders emphasized the need to expand domestic demand and increase residents' income, particularly in sectors such as automobiles, electronics, home furnishing, and services like sports, leisure, and cultural tourism. Shares of internet giants and electric vehicle companies also saw positive movement.
China's exports fell by 7.5% in May compared to the previous year, while imports fell by 4.5%. Weak global demand has put pressure on Beijing to boost domestic consumption to support the overall economic recovery. Analysts warn that the worst is yet to come, and China needs to look closer to home to address the issue.