Beware! China Won’t Save The World Economy

Credit: Nuno Alberto/Unsplash

The world depends on China’s economic recovery to fuel world growth and helps fend off a recession. Make no bets on it, as reported by WSJ.

China in trouble

After years of Covid-19 lockdowns, China’s recovery will probably look very different from past ones. Economists caution that it may not be as effective for many regions of the world as hoped.

China has typically relied on fiscal stimulus from the government and significant investment to pull itself out of downturns. After the financial crisis of 2008, this combination helped lift the world economy out of its rut.

This time, China is heavily indebted, its property market is in trouble, and much of the necessary infrastructure has already been constructed. As a result, since the government abruptly abandoned its zero-tolerance attitude regarding Covid-19, the industry’s most recent rebirth will be driven by users who are letting go of nearly three years of public-health restrictions and travel bans.

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Source: WSJ


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