These are turbulent times for the Asian giant and in the midst of this maelstrom, China has warned that its economic recovery is going to be tortuous, that is, they somehow accept that they have this problem, that they are in trouble, the second largest economy of the world is reeling, what implications will this have for the entire world.
China has been the engine of the global economy for decades, any movement, any fluctuation in its economy, has repercussions in the supply chains in the stock markets and of course in the economies that are associated with China, which is why what is so important is today they have declared, because they are signs that when "the river sounds it is because stones carry"
Clearly, what no one can deny, not even China is in the role of denying it, is that if they have difficulties, China is having a hard time, China's GDP growth in 2022 had been very good, enviable, but if we stop to analyze the trends, they obviously have an economic slowdown that is putting them in quite a bit of trouble.
China is pouring rain on it, literally everything that should be right in a country in China is going wrong, from economic growth that suddenly plummeted, a terrible real estate collapse, horrendous natural disasters like the worst rains it has ever had in its history, up to millions of unemployed who today roam the streets of Beijing and even an earthquake where it shakes the least, everything has happened to China at the same time in less than a month.
Financial analysts have already given a name to this phenomenon of misfortune in China, "the prolonged economic covid" an alarming diagnosis and with good reason; Chinese exports have suffered their biggest drop in 3 years, we are talking about a drop of 14.5%, compared to the figures for July 2022, last year, to put it in perspective, this means in absolute numbers a loss equivalent to tens billions of dollars, that is not a small thing, it is a worrisome sign for Beijing, because exports have been the engine of China's economic growth and they are no longer there, but how will that affect us in Latin America?
One of the main reasons is the Global slowdown in the demand for Chinese products, we thought that China was always going to sell too much and today we are seeing the opposite and this is related to trade tensions, the supply chain interrupted during the "Pandemic" and for of course the continuing impact it's had.
And to China's bad luck for the last three months, Chinese exports have been steadily declining for the last seven months, down 5%, and many would say that the world wants to disassociate itself from China and that in this battle between the West and china is losing china, but it's a lot more complicated than that really.
There is a serious drop in global demand the world economy is slowing down that is something that no one can deny imagine that the main economies of the world like the United States, the European Union, India, are growing at a much slower rate, last time In fact, something like this happened during the 2008 financial crisis, when global GDP fell by 1.7 percent with the pandemic.
The cost of living is through the roof, food prices worldwide have increased and not just your perception of where you live, this is really happening all over the world, prices have increased on average by 40% In the last year, everything is very expensive, this means that families have less money to spend on other products, such as Chinese products precisely.
And currently there is high inflation that is affecting everyone. When we talk about inflation, friends, we are talking about a general increase in prices, in countries like Argentina, for example, where we already know that inflation has reached sky-high numbers and not only that, in In developed nations such as the United States, for example, the annual inflation rate in 2022 was the highest in the last 40 years.
The focus China has today is to save money, people all over the world are buying less, and that means fewer orders for Chinese factories so for four straight months, factory activity in China has plummeted, workers today They obviously have fewer orders to process, factories are producing less, and their economy is collapsing.
The debt China has a total debt that exceeds 300% of its GDP, 300%, this means that it is triple its annual economic production, this includes government debt, corporations and also households. Do you think this is sustainable, obviously not.
