Jason Douglas of The Wall Street Journal explains that China’s economy will get a boost from stimulus, but its headwinds will grow. He writes:
China’s economy slowed in the third quarter as the drag from a shrinking property sector weighed on growth, but strengthening retail sales suggest it is emerging from a soft patch as stimulus measures start to kick in.
Still, China’s economy is likely to struggle for a while yet, economists say. Real estate remains a major risk, with home sales crumbling and developers China Evergrande Group and Country Garden struggling with heavy debts. Consumer confidence is fragile and the global backdrop is darkening because of war between Israel and Hamas.
Longer term, China faces a daunting list of headwinds, including frosty relations with the U.S.-led West, worsening demographics and a difficult reorienting of its economy toward growth powered by consumption and advanced manufacturing and away from property-driven investment. Economists expect growth to slow in the years ahead as China wrestles with these challenges. […]
Investment in buildings, machinery and other fixed assets slowed, however, underlining the drag from property. Investment rose 3.1% in the January-to-September period, compared with the same nine months in 2022, a weaker pace than the 3.2% expansion over the first eight months of the year.
Unemployment fell to 5% in September, from 5.2% in August. China stopped publishing data for joblessness among young people in June, citing methodology wrinkles officials said they wanted to iron out. But many analysts attributed the decision to official discomfort over how high youth unemployment had risen, with the June data showing about one in five of people aged 16 to 24 were looking for work.
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