Is China’s growth story over? | CNBC Explains

Is China’s growth story over? | CNBC Explains

China is the second largest economy
globally, ‘the factory of the world’ and it’s home to a growing middle
class with a lot of disposable income. But it’s also embroiled in a trade war with the
world’s biggest economy, the United States. And American officials are going hard on China
because they think its economy is vulnerable. They respect us again. America is back! But is the economic superpower
really slowing down? A manufacturing survey in August showed
that while China’s output continues to grow, new orders are rising at their
slowest pace in 15 months. The trade war is likely to slow exports,
but that’s just one of many factors that could contribute to a
slowdown in China’s growth. Let’s go back to the basics. China’s GDP growth has
slowed significantly, compared to its rapid rise
over the last two decades. But because China’s economic growth figures
appear much more smooth and steady than other countries’ peaks and troughs, some economists
downplay the significance of China’s GDP figures. Instead, let’s look at what’s driving the Chinese
economy and how China is doing in these areas. China relies on infrastructure
to drive overall investment. This type of spending on physical assets
contributes to nearly half of China’s GDP. That’s way more than any
other major economy. The bad news is that China’s fixed asset investment
is slowing significantly, falling to a record low. But some economists warn against
paying too much attention to the historically low figure because the way
that data is measured is being revised. China has typically relied on
investment to grow its economy, but it’s not so easy for the government
to boost investment now. That’s because of its
growing mountain of debt. The country had a relatively stable level
of debt until the financial crisis in 2008, when it spent a whopping 12.5% of
its GDP to stimulate the economy. Since then, its debt has steadily grown to
almost 250%, much higher than expected for an emerging economy, resulting
in several warnings from the IMF. Chinese authorities have
been trying to rein it in. In April this year, China’s state-owned banks
were told to stop lending to local governments. But its policymaking is also being
affected by the trade war. Recent reports say Chinese officials
are pushing banks to lend more again. A country’s exciting growth story usually
comes from a rise in population and productivity. For instance, India’s young population is
the reason why it’s expected to take the title of the world’s fastest
growing major economy. In contrast, China is the world’s most populous
country, but it has a rapidly ageing population. While China is trying to improve productivity
through automation and robotics, the effects of an ageing
population single-handedly slows GDP growth by between
0.5 and 1 percentage point. Alright, so China is getting older, but older
people can still be great consumers. China is trying to count on its growing middle
class to move its growth towards consumption. But lately, there have been questions
about whether the Chinese consumer still wants to spend on this
premium latte or pricey iPhones. This year, China’s two major stock exchanges
lost almost a quarter of their value, prompting concerns that consumers
will be tightening their belts. But unlike in the U.S., analysts say China’s stock market
is almost completely disconnected from its economy. In fact, the story of consumption in China
really depends on what data you look at. Monthly retail sales have been
slowing but quarterly spending, which includes travel and
education, are on the rise. Similarly, China’s online retail giants
reflect a nuanced picture of consumption. In the second quarter of this year, Alibaba saw
sales rise by more than 60% from last year. Although, its rival faced slower sales. There’s a lot of talk about
Chinese consumers downgrading, but that means companies making
affordable goods are still doing well. For instance, a Tencent-backed app selling
heavily discounted products called Pinduoduo has rapidly become one of China’s top
apps, drawing 300 million customers. It listed on the Nasdaq in July. China faces a lot of challenges to its growth. Its engine may be sputtering now,
but as it gears up to fight the U.S. in the trade war, there’s no
telling how its growth story will unfold. Hey everyone, it’s Xin En. If you want to check out more
of our videos, click here and here. As always, feel free to leave any suggestions
for future videos in the comments section. Thanks for watching and
see you next time!

100 thoughts on “Is China’s growth story over? | CNBC Explains

  1. Gordon Chang knows best! One day, just one day, his prophecies will come true. He will hope it will before his death so he can have the last laugh and claim the accolade.

  2. China will rule the world 😂😂😂😂😂😂😂😁😁😁😁😁😁😁😁😁😁😁😁🤭and they mentioned India just to get Indian views because Indians are like sheep no offence it's true for example pewdiepie

  3. Everyone in China, even high school students, knows a basic fact that India is the NO.1 in the world.
    The statistics of CCP government is all fake.😂

  4. China may collapse but they will be back after this lesson . they may grow even better and stronger after USA gave them a good lecture. Let look at 35 years ago, China had nothing. They were 3/4 in poverty. And look at today.
    World get ready, China will lead the world a different direction in the next 10 years

  5. America’s roads and bridges about to collapse.. to me America seems like a developing country as well. Western Europe has all the nice stuff.

  6. i hate people assume anyone with a Chinese sounding name instantly become a Chinese expert

    most of those people can not read/write in Chinese, they have the same level knowledge of China as a random American from Texas

  7. Wait… hasn't China already collapsed 1 or 3 or 3 or 4 or…. decades ago? Aren't all tales of growth just farcical communist propaganda?

  8. 讲真,印度我呆不下去了。今天进餐厅吃个饭,吃完后,发现刚吃饭时在下雨,然后门口一片汪洋。车头灯都快淹掉。真希望印度政府能够多投资一些钱修修基础设施啦。不要整天想有的没的,脚踏实地好不好。在中国要是哪个城市排水不好是要上新闻批判的啦。

  9. I want to ask. I'm the cheapest Labour in China, Manual laborers without technical content. with an hourly wage of 14 yuan ($2.2) an hour. What level is this worldwide? I have one more question for the indians. India produces less food than China. But they can export a lot of food. China needs to import a lot of grain. The population of our two countries is about the same. Do indians eat less?

  10. it isn't just about who has the younger population, India has always had a younger population then China because China has a higher life expectancy for many decade, India has failed to beat China in growth. there are a few reason: 1, red tape, india has a fragmented bureaucracy. 2, cultural disunity, there is no common language spoken by all indian, this mean alot of time and money has to be spend translating thus slowing down roll out of services across the national. 3, education, indian are less educated, partly because of the lack of a common language, the spread of information and knowledge is slower. thus this is why despite india having a younger population for decades, has fail to turn that into a competitive advantage.

    the other issue is look at percentage is deceiving, as China's economy is double the size, even when China is growing at half the rate of India, the market is actually growing faster in absolute value, this is why despite india growing "rapidly" in recent years, investment in india is slow because the absolute value of growth in India is not really as strong as the number suggest.

  11. This prediction has been going on for more than 20 years now. India and China implemented open door policy in early 1980s, just look the difference after 30 years !

  12. For those who are evil will be destroyed by US
    President Trump and the world's should call for a total economic boycott of red evil China …..
    "We must take strong defensive actions to protect America's leadership in technology and innovation against the unprecedented threat posed by China's theft of our intellectual property, the forced transfer of American technology and its cyber attacks on our computer networks,"
    "These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to red China,"
    'Road Belt' China Destroys Cambodia….Vietnam………? Prostitution, gambling and land grabbing, economic damage and dependence on them
    How is China's New Silk Road transforming Vietnam and Laos?
    How will China's New Silk Road shape Myanmar's economy?

    BREAKING NEWS Out Of China – Beijing Empties the South China Sea | VietNam | Philippines

    China's growing influence in Africa

    American Stores Stop Buying Chinese Imports…NOW
    Slowly and gradually I noticed a lot of Americans are now buying American, growing American and making in America. Some started boycotting Chinese goods. More or less I still agree that in short to medium term this ban on Chinese imports would exert tremendous pressure on the world economy, a new recession will result.

    But in the long run, say 15-20 years from now, the American economy will get more benefit than any of the other economies in the world if we ban Chinese imports today

  13. They are going broke China will be more broke when the end of the next two years of the affects of the trade war their money will be just like the value Venezuela’s money so it want matter how much money they make in three years it won’t be Worth nothing

  14. How do you know figures about China so well? Google is banned in China and Chinese government is very secretive about their figures and statistics. How do you assume whatever is on the internet is the truth? Bullshit video

  15. Why would anyone want the second largest economic system to fail in a globalized world?How stupid is it to think any country could get away with the impact……

  16. let's look at the track record of national management, of china, and the usa, over the last 40 years. pretty consistent, both of them, and summarized neatly by looking at trump, and xi jinping. any other questions?

  17. Chinese workers get paid less to do more work and you wonder why some American businesses can't compete with China. Especially in the construction industry, the wages are night and day. And you wonder why Chinese infrasture is doing much better than American infrasture.

  18. Wasn't China suppose to collapse last year, the year before, or is it next year? I get so confused cause I read this constantly from the true western media all the time.

  19. 一个收过路费的国家整天指点江山纵横寰宇,李家坡人均带战略经济分析师,李光耀老先生确实千古卓绝,但指点江山前请先看清自己的水平

  20. In New Zealand my friend saw this Chinese guy pull up in his Ferrari. He asked him what he does for a living. His reply: 'I own a factory in China'.

  21. The amount of stupid idiots in this comment section with no clue on what GDP means and differences to what wealth of a country means is astounding , so many brain dead here !!

  22. The media likes two say two things with China. It talks about how it is on the brink of collapsing. The other is how it will surpass the U.S. in the upcoming decade. Then the date the give comes and then you find the same sentence reappears and now has a new date. They are really just printing click bait sensationalism representing American anxiety. I quit believing it years ago. Wake up people. No one actually knows what they are talking about regarding China. Even the most elite experts with publish books talking…. don't believe them. They are making sh*t up as they go along to sell books exploiting American anxiety and to get higher ratings. Even the Chinese have doubts about where they are heading and the hype. You can't trust the damn hype you hear.

  23. i dont understand why this measure China's "TOTAL" debt % per GDB. Every country has very high private debt % to GDB, and thats normal. We are use to see Goverment debt% per GDB not Total debt. China's Goverment debt to GDP is only 47%…

  24. Keep fighting china and us. We Indians will silently catch up and kick your asses.

    The 3rd always benefits from the other 2 fighting

  25. The thing is China borrows money from within/inside their own banks, government banks. So they won't stop loaning even if economy, like City buildouts, train projects slow down, useless projects keep them busy & seem as the economy is great, but it's just inflation especially since these are projects that will not be used or inhabited by people, not now at least, it does give jobs & raise GDP but their GDP to debt is over $30 trillion. The US for example borrows from outside banks & if the bank is afraid to loan US money because of loss they just won't loan money at all.
    So if China was actually borrowing credit from outside sources/banks, with the inflation & slowdown scare they would not loan China any money and would of actually collapsed or slowed down long ago. But they borrow money from themselves without limit. All facts

  26. They can mass produce. Good on them. All of the things are designed outside of China, the only thing China does is produce because it has cheap limitless amount of labor. They're not inventors , they're workers.

    America, Europe and Japan are inventors and the technologies that America has are sealed off to the rest of the world.

    USA has 21 trillion USD GDP + Federal Reserve + The biggest world currency manipulator – the USD + improved technology + more allies to trade with and gain from.

    China with all their manufacturing might is sitting only with 14 trillion USD which is a proof that they're stuck in just another hopeless strive to catch up to the sheer American economy. Their growth is decreasing slowly but surely.

    Long live USA & democracy, Japan always with USA! ^^

  27. All you fake News Craps still talking about the same thing ?! And you people must be desperate by using an Asian woman to jive about other Asian .

  28. China has collapsed from a poor country into a modern superpower and world's second-biggest economy. Oh the poor people of china

  29. Shut yp, annoying dishonest lying prick.
    Me myself, not a fan of China but the way it was presented are quite misleading and totally one sided pro western.

  30. maybe change the book title to China will fall down someday nobody knows which is mire believable than the current one

  31. I thought China stopped growing according to this piece of news 10 months ago. Apparently it still is even during the race war 😀 btw the way this lady speaks English just makes me really uncomfortable for some reason.


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