China may fail to meet target of 5.5 pc GDP growth this year
Mar 10, 2022
Beijing [China] March 11 : China, which is the second-biggest economy in the world, is facing a slowdown due to a slump in manufacturing, real estate, exports, inflation, and consumer spending, according to several reports, which added that the ongoing Ukraine crisis poses may further damage its economy.
This year, China has set a target of around 5.5 per cent for GDP growth, which is the lowest in decades.
The Hong Kong Post reported that rising crude oil prices and hurdles in the development of the Belt and Road Initiative (BRI) are going to worsen China's economic woes. China's GDP had grown by 8.1 per cent in 2021. However, it would not be easy for China to even reach 5.5 per cent growth this year.
As per a survey by Beijing-based the American Chamber of Commerce (AmCham), half of the companies in China have lost significant production capacity after the unprecedented power crisis had hit the country in 2021.
While, money supply that includes cash and demand deposits at banks fell 1.9 per cent in January- lowest since 1997. It was triggered by a 5.3 per cent drop in corporate deposits, The Hong Kong Post reported.
Rising unemployment is another major problem China is facing as unemployment among fresh university graduates increased to 0.88 in the fourth quarter of 2021 from 0.79 in the second quarter of 2020, as per reports.
At present, the Ukraine crisis can have a serious negative impact on China exports- a key contributor to the Chinese GDP if the conflict lasts longer. China's trade with Russia and Ukraine are valued in 2021 at USD 147 billion and USD 19 billion, respectively. The recent sanctions on Russia by the US, European Union and Canada among others will certainly impact Chinese overseas trade, according to The Hong Kong Post.
The surge in crude oil prices is another problem for China's economy, it added.
