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China going to lose the crown of economic superpower These figures are giving testimony to defeat | Is China going to lose the crown of economic superpower? These figures are giving testimony to the defeat of the dragon

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Is China going to lose the crown of economic superpower? These figures are giving testimony to the defeat of the dragon

Highlights

  • According to the World Bank, China’s economic growth will slow sharply in 2022
  • The World Bank also reduced its 2022 forecast to 5.1 percent from 5.4 percent
  • Shows second slowest pace of growth for China since 1990

Is the sun about to set in China, the world’s biggest economic power after America? These fears are clearly visible from the news and figures coming from China. During the Corona crisis, where the world’s strong economies were devastated, on the contrary, China gave positive returns. But the subsequent developments and the policies of the Chinese government themselves put such obstacles, that the flying dragon appears to be overtaken.

slow growth rate

According to official data released by the National Bureau of Statistics (NBS), China’s economy grew at 8.1 percent last year. Looking at other economies, it may seem high. But this is less than the World Bank’s estimate of 8.5. The Chinese economy grew at a rate of 4 percent in the fourth quarter, while the rate of economic growth in the third quarter was 4.9 percent.

Shake foundation of realty and tech industry

The country’s real estate sector and IT sector played an important role in China’s economic progress. But in 2021, the foundation of both these sectors seemed to be shaken. On the one hand, there is a slowdown in the Beijing market. At the same time, China’s second largest real estate company like Evergrand Real Estate Group is facing a huge debt crisis. Everengrad is in danger of bankruptcy. On the other hand, due to tightening of screws on tech giants like Alibaba and Tencent, a crisis has arisen here too. Due to these crises, now investors are also cutting edge from China.

Industry of its own government

2021 was the year of economic crisis in China. The Chinese government itself had a hand in creating this crisis. The government took strict action on property, education, technology and coal sectors. On the other hand, there is a huge imbalance in the Chinese labor market. A large number of workers have lost their jobs due to their policy of reducing carbon emissions. The crackdown on the coaching industry has also made a large number of people unemployed. The property sector accounts for 26 percent of the country’s total employment. The problem of unemployment is expected to become more serious due to the debt crisis of this sector.

production dropped in factories

The biggest problem for China is the difficulties in the factory sector. This year the production of factories has dropped due to power crisis. It is not possible to handle this until China solves its energy crisis. At the same time, due to the chip crisis, the Chinese electronic industry is operating below capacity.

Fall forecast for 2022

The growth of the economy in China is projected to decline within the year 2022. According to the World Bank, China’s economic growth will slow sharply in 2022. It expects China’s gross domestic product (GDP) to expand by 8 percent in 2021 from a year earlier, lower than its previous forecasts. The World Bank also lowered its 2022 forecast from 5.4 per cent to 5.1 per cent, marking the second slowest pace of growth for China since 1990.

World Bank expressed concern

The current World Bank report said downside risks to China’s economic outlook have increased. One reason behind this is also the Omicron variant of Kovid. Apart from this, the slowdown in the property sector may continue. Which will hurt the economy. Meanwhile, many companies in the country have also started heavy layoffs.

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