चीन की इकोनॉमी क्यों बनती जा रही है दुनिया की चिंता, क्या कहते हैं आंकड़े?

China’s economy is facing problems these days. For the first time in the last two years, a significant decline has been recorded in the prices of goods used by common people in the country in July this year.

China is the second largest economy in the world. Also, the population of this country is the highest in the world after India. Where one billion forty crore population resides. With such a large population, China is surrounded by many problems these days. Which includes slow growth rate, unemployment and turmoil in the property market.

Besides, this country is also facing the situation of deflation these days. This situation arises when the demand for goods starts decreasing in the market or the production starts exceeding the requirement or the consumer starts hesitant in spending money. Apart from this, the chairman of Chinese real estate developer Evergrande has also been kept under surveillance by the police. The shares of his company have been suspended from the stock exchange. Evergrande is a big name in China’s real estate business, which is a major part of the economy there.

These issues are a big problem for China, although their impact is not limited to this country only. In fact, they can have an impact on the global market as well. According to analysts, how this will directly impact the multinational companies, their employees and the people working there depends on how the company is connected there.

The impact of the Covid pandemic on the country’s economy
China’s declining economy is raising questions whether the country could not emerge after the Covid pandemic at the pace that was expected. Was.

Let us tell you that China was expecting global momentum by coming out of zero Covid policies, but this year the GDP here has grown only by 0.8 percent in the last three months.

Now the estimated annual growth is only around 3 percent. Which is the weakest in the last three decades.

Economists here had hopes that after the Covid epidemic, the people of the country will move ahead in spending and will also invest money in private companies. Due to which the country’s economy will improve and the global economy will also improve.

Although initially rapid improvements were seen in China’s economy. In such a situation, there was an increase in demand for local tourism, retail and exports. But all this did not last long. By the end of the second quarter, economic analysts told a different story.

Data for August 8 showed that the country suffered the biggest decline in exports in more than three years. China’s exports declined from a record high of $340 billion in December 2021 to $284 billion in May 2023.

July’s export figures were even more worrying, registering a decline of 14.5% compared to the year-ago period.  Customs data showed exports declined by 12.4% in June to $281.8 billion.

Imports also fell 12.4% to $201.2 billion compared to a year ago amid signs of weak domestic demand. After this, the country’s global trade declined 20.4% to $80.6 billion from the record high of a year ago. .

After this, serious Consumer Price Index (CPI) figures came out. In which China’s economy was seen at its lowest in the last few years.

Is China’s economy going to collapse?
The economic data coming from Beijing in the last few months indicates that all is not well with the world’s second largest economy. Which President Xi-Jinping did not expect.

Many big companies around the world are doing business with China. In fact, many companies like Apple, Burberry and Volkswagen buy raw materials from China. Which is exported from the country’s huge consumer market. 

It is said that China is behind more than one-third of the world’s development. In such a situation, if the impact of recession is visible in China, its impact can be seen on the international market.

American credit rating agency Fitch had said some time ago that China’s recession is affecting global growth prospects. However, after some time, the agency downplayed its impact on the entire world.

Some economists also believe that the impact of China’s recession on the entire world is an exaggeration.

George Magnus, an economist at the China Center of the University of Oxford, told the BBC, "Mathematically it is true that China’s share in global growth is about 40 percent."

He further said, "But who is benefiting from that development? China runs a huge trade surplus. It exports more than imports, so whether China grows or not, in true sense, its impact will be greater on China as compared to the rest of the countries of the world."

On the other hand, the consumption of raw materials in the Chinese market is decreasing, because the expenditure on goods, services or construction of houses is decreasing in the country. 

Due to which, in the month of August this year, China had reduced the import of raw materials by 9 percent compared to last year.

Speaking to the BBC, Roland Rajah, director of the Indo-Pacific Development Center in Sydney, says, "Big exporters like Australia, Brazil and many countries in Africa will be most affected."

Why are falling prices in China increasing concern?
According to a report by The Guardian,  China has exported 41% of the world’s consumption goods in the last decade, which is more than the US. This is almost double the 22% contribution of the EU, and much higher than the euro area’s 9% contribution.

This means that China has produced 1.1 percent of the goods of the 2.6% real growth rate of the world economy. China accounted for such a large share of global growth because its economy was growing at about 8-9% per year.

Now that its growth rate is half, its contribution will also be halved to about 0.5 points. Last year, China also made a huge investment in the Belt and Road Project. Which is more than one trillion dollars.

In such a situation, China has provided technical assistance to more than 150 countries to build roads, sea ports and bridges.

If the problem of recession continues in this country, then it can have a direct impact on the ongoing projects as well.

India-China trade statistics
Import-export between India and China has increased significantly in the last 26 years.

Imports from China have increased by 19.5 percent every year, while exports to China have also registered an increase of 16.6 percent.

In 2021, India imported $94.1 billion from China, while India’s exports to China stood at $23.1 billion. In 1995, India’s imports from China were $914 million while exports to China were $424 million.

By 2023, there was a decline in import-export between the two countries. By May 2023, while India imported $9.5 billion from China, the export stood at $1.58 billion.

But the figures for the year 2022 were shocking.  This year, for the first time, trade between the two countries was worth 136 billion dollars. 

This was the time when their relationship was not going well and the trade figure had crossed 100 billion dollars.

In such a situation, the trade relations between the two countries indicate that if China’s economy is affected, its impact will be seen on India as well.

In a conversation with BBC, Professor Faisal Ahmed said, "The countries of RCEP (regional comprehensive economic partnership, India withdrew from it in November 2019) will get these goods cheaply and India can get these goods from them. This is a big challenge for India."

They say that China has a trade agreement with ASEAN countries and India also has a free trade agreement with it. India wants changes in its rules so that it can get things cheaply and its import deficit can be reduced.

The effect of deflation will also be visible
If we talk about other countries, China manufactures many such things which it exports to other countries also.

In such a situation, if things are sold at lower prices in the Chinese market, then it will affect the exports to other countries and other countries will also get those things at lower prices.

However, its clear impact will be visible on other countries also. Where buying cheap goods from China will reduce the production of those goods in other countries and unemployment in that country will increase.

Now it remains to be seen what the future path of China is going to be. Its impact can be seen in the global market. Also, whether China’s economic situation affects India or not.