If it were not for the literal hundreds of billions of dollars in stolen IT from the United States per year. we would not have seen the so-called Chinese miracle. Even now, they would face collapse, but with their puppet in the White House, bribed with tens of millions of dollars, China knows they hold all of the cards. Yet even now, they have serious economic problems
In June, China’s manufacturing sector experienced a decline for the second consecutive month, while the services sector recorded its lowest performance level in five months, according to recent data. This ongoing downturn has intensified calls for additional economic stimulus measures as the country seeks a robust economic recovery.
⚠️ CHINA’S JUNE FACTORY ACTIVITY CONTRACTS FOR SECOND MONTH
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— PiQ (@PiQSuite) June 30, 2024
The National Bureau of Statistics (NBS) reported that the purchasing managers’ index (PMI) remained static at 49.5 in June, echoing the figures from May and staying below the critical threshold of 50, which distinguishes expansion from contraction. This stagnation aligns with expert predictions and underscores persistent economic challenges.
Despite indications of robust export activities which traditionally drive economic growth, domestic and international demands are still insufficient to fully utilize China’s extensive manufacturing capabilities. This imbalance continues to hinder any potential upswing in producer prices. Notably, while production levels have shown some resilience, other critical indicators such as new orders, employment, and raw material stocks persist in contractionary zones.
China’s trade dynamics are also under scrutiny as exports have recently surpassed expectations. However, ongoing tensions with Western countries and an enduring real estate crisis are weighing heavily on domestic demand, raising uncertainties about the sustainability of export-led growth.
China’s factory activity contracted for a second straight month in June, signaling weakness in an area Beijing is betting on to drive the economy. https://t.co/vOr4UuyVyM
— Bloomberg (@business) June 30, 2024
Additionally, the non-manufacturing PMI, which encompasses services and construction, dropped to its lowest point since the previous year, reflecting reduced consumer confidence and the fleeting impact of holiday-related spending increases. Particularly, the services sector dipped to a new low over the past five months, alongside a notable decline in the construction sector’s performance.
In response to these challenges, there is an anticipation of more robust policy support from the Chinese government, especially in fiscal measures aimed at stimulating domestic consumption and addressing economic vulnerabilities. Despite the constraints on monetary policy due to pressures on the national currency, fiscal initiatives are expected to dominate the government’s strategy to revitalize the economy.
However, concerns about high local government debt and deflationary pressures loom large, potentially hindering a swift economic recovery. These concerns are compounded by a series of economic measures rolled out since the previous year, which have yet to significantly lift market and business sentiments.
In an effort to mitigate these economic strains, China’s central bank has initiated a relending program targeted at the affordable housing sector to better align supply with demand and stimulate property sales.
This economic situation is set against a backdrop of strategic discussions at national levels, with Premier Li Qiang recently highlighting the growth of new industries as a cornerstone of healthy economic development at a global economic forum. With a major political meeting scheduled for mid-July, where top officials will convene to set the agenda for the next five years, stakeholders are keenly awaiting further developments that may define China’s economic trajectory in the coming period.
One final note on it all is we have yet to see China actually be honest about actual stats in the country. We assume they are all lies, which makes the smartest among us to think things are even far worse than they are admitting to now.
Major Points
- China’s manufacturing PMI remained below the growth threshold for the second consecutive month in June, indicating ongoing economic contraction.
- Services sector activity fell to a five-month low, reflecting weakened consumer confidence and reduced demand.
- Despite strong exports, insufficient domestic and international demand continues to limit the full utilization of China’s manufacturing capacity.
- Analysts anticipate further government intervention, likely through fiscal measures, to stimulate domestic consumption and address economic challenges.
- Concerns about high local government debt and deflationary pressures persist, potentially affecting the pace of economic recovery.
Susan Guglielmo – Reprinted with permission of Whatfinger News
