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China’s struggling economy: experts opinions

two businessmen walking through an open hallway

The property market in China is declining, deflation looms over the nation, and the investment market has experienced turbulent moments this year. To make matters worse, January's numbers show that manufacturing has contracted for the fourth consecutive month. All of this contributes to skepticism towards the world's second-richest nation.


Eswar Prasad, an official at the International Monetary Fund, commented that predictions of China's GDP surpassing that of the US are declining.


However, China does not admit to its economic decline, and moreover, its leader stated that the country's economy is becoming more resilient and dynamic. This optimism has led to some improvement in the luxury sector and manufacturing activity, creating bullish rumors among investors.


On the other hand, Paul Krugman is one of the voices with bearish tones regarding China, stating that the country is stagnant and disappointing.


From poor leadership to high youth unemployment, China faces challenges on all fronts.


The Property Crisis. Housing demand is estimated to decline by 50% over the next decade, according to the World Economic Forum in Davos. And it is expected to worsen, according to investor Kyle Bass, who said that the country's heavily indebted property market has triggered a wave of defaults among public developers.


Shimmers of Hope. The Institute of International Finance, on the contrary, says that China has the political capacity to overcome the economic situation and achieve economic growth of 5%.


Marko Papic, strategist and partner at Clocktower Group, predicts that the stock market will jump by 10% in the coming days. Looking ahead, China has hurdles to overcome. However, it remains to be seen if it has the firepower to do so.


Source: cnbc


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