China’s economy is struggling to recover from the COVID-19 pandemic, a trend that could negatively impact average Americans through rising product costs and unfavorable trade policies, experts say. the house told the Daily Caller News Foundation.

According to the report, China’s gross domestic product (GDP) grew at an annual pace of 6.3% in the second quarter of 2023, but only 0.8% higher than in the first quarter. It shows that the economic recovery is getting worse in the wake of the pandemic. National Bureau of Statistics of China (NBSC) press release. Experts pointed to key factors impeding growth such as China’s decline in commodity production and exports, as well as debt. may affect Americans. (Related article: ‘Dead end’: China may be in big debt crisis, experts say)

“An important thing to keep in mind when looking at the Chinese economy is that it is the second largest economy in the world and until recently was the main engine of economic growth,” said the American Enterprise Institute. Desmond Lachman, senior researcher and former deputy director, said. He, of the International Monetary Fund’s Policy Development and Review Division, told the Daily Caller News Foundation. “China’s economic slowdown could cast a shadow over the U.S. and global economic recovery.”

Retail spending in China has struggled, with June retail sales only up 0.2% from May, indicating that many Chinese consumers have low confidence in the economy and prefer to save rather than spend. , the paper said. wall street journal.

According to NBSC, the unemployment rate among 16-24-year-olds increased from 19.6% in the first quarter to 21.3% in the second quarter, while the urban unemployment rate remained stagnant at 5.2% for the second consecutive quarter.

Consumer prices may rise due to the lack of access to cheaper Chinese goods for Americans, while US companies may see a slowdown in growth due to lack of investment from China. The Chinese government’s policies against China may undermine the viability of the United States. An expert told DCNF about US exports to China.

“The main risks to China’s economic downturn are growing global economic instability and the possibility of trade-export policies that protect China’s industries and exports through industrial support and other trade policies that lead to further tariffs and interventions. “It will most likely lead to more market distortions, ultimately leading to higher consumer prices,” Ryan Yonk, an economist at the Institute for Economic Research, told the DCNF. Told.

The main reasons for China’s economic woes are weak exports and its attempt to pay off its huge debt, according to Peter St. Onge, an economist and research fellow at the Heritage Foundation’s Thomas A. Law Institute for Economic Policy. It is said that increased during the COVID-19 pandemic.

“There are basically two reasons for China’s poor performance. One of them is the slowdown in exports. The whole Asian economy has been hit,” Seng Onge told DCNF. “The other is deleveraging, which is about $50 trillion of China piling up debt … China has huge real estate debt, and local governments have huge debt.”

Seng Onge said Chinese companies will have less money to invest in the United States, and American companies will also feel the pressure from China’s economic slowdown.

“If you try to identify the biggest red flag, it’s that Chinese money probably won’t come in as much, and that’s what’s been emerging in the US for the last decade,” St. Onge told DCNF. . “The influx of Chinese money is beneficial to U.S. companies.”

Clark Packard, a research fellow at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, said that for the broader U.S. economy, “weaker demand in China will hurt U.S. exporters who sell to the country. will give you,” he told the DCNF. A recession or recession factor in the United States.

China will also take steps to address slow growth by enacting policies that may further disadvantage U.S. consumers, such as competitive trade policies aimed at supporting China’s domestic production. but could hurt companies doing business with China as well as the US.

China’s GDP growth falls short of expectations, sounds alarm bells for recovery https://t.co/6Jnvieov3I

— Bloomberg (@business) July 17, 2023

Packard also sees China as a potential national security threat to the United States due to the economic downturn.

Packard told the DCNF, “There is an open question as to whether a weak domestic economy is increasing Beijing’s military aggression. And they’re trying to divert attention away from the economic collapse.” “Look, [Foreign Direct Investment] Investment in China has declined sharply in recent years, largely due to President Xi’s aggressive geopolitical stance, and foreign investors believe China is safe given widespread tensions and uncertainties. I doubt whether it is a reasonable economic bet. ”

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