Commentary
The Chinese Communist Party (CCP) is taking contradictory economic policies that seem to make little sense: cutting rates, increasing credit, and enforcing the “zero-COVID” policy while facing mounting debt, falling currency, declining consumer demand, rising unemployment, and slowing growth.
The Chinese economy is arguably in worse shape than it was 30 or even 40 years ago because, back then, it was not teetering on the brink of collapse. And Beijing seems to have no answers.
Currently, factory activity is down as it has been steadily contracting over the past three months. Exports were weaker, and imports fell in September. Pessimistic about the future, Chinese consumers are spending less. Retail sales grew by just over half of the predicted rates in July, coming in at 2.7 percent as opposed to the forecasted 5 percent. As a result, consumer price inflation (CPI) dropped to 2.5 percent. The People’s Bank of China (PBOC) sets a ceiling for CPI inflation at 3 percent—the amount of inflation the CCP believes to be desirable and healthy for the economy. Numbers below 3 percent mean that the economy is growing too slowly….