Beijing [China], August 3 (ANI): China is unable to establish a meaningful economic lead over the US as the country continues to register receding growth and grim performance in the second quarter amid the ongoing housing crisis and the economic slowdown.
The growth rate in the country has dropped to 0.4 per cent in the second quarter of 2022.
The zero-covid policy of China might be a factor leading to the latest fall in growth rate, a slump in the real estate sector of the economy, a policy of inducing growth through investment in infrastructure that has little productive use, and sinking of resources in bad investments overseas through the Belt and Road Initiative, The Financial Post reported.
In April the retail sales in China slumped by 11 per cent amid continuous coronavirus lockdowns and uncertain business conditions.
It will be difficult for the Chinese economy to revive in the coming months as the Communist Party of China on July 28 announced that there would be no let-up in the anti-Covid measures.
It will be difficult for the country to achieve the growth target of 5.5 per cent, which last year stood at only 2.5 per cent, the publication reported.
Experts believe that the emergence of the Chinese economy as the prima donna of all nations is just fiction as the country is unable to overtake the U. S. economy.
"Slowing growth would make it clear that China cannot really establish a meaningful economic lead over the US. It has important implications for perceptions about where the world is headed," chief economist Ronald Rajah said, the publication citing Lowy Institute Think tank said.
Several bizarre stories from the real estate sector reflect the desperate situation in the country.
One such story is of a real estate developer in east China allowing buyers to pay for dwelling units in watermelons; 5,000 kg of fruit and 100,000 yuan. Another story states that the authorities in China demolished 15 skyscrapers with five tonnes of explosives in the second half of 2021.
Even though real estate boomed in the country in 2008, it has started to recede since 2015, it added.
There is a deep slump in the country's property market. China's ailing property market is one of its biggest economic headaches.
As of June 2021, China Evergrande Group had more than USD 300 billion in debt and other liabilities, such as unpaid bills to suppliers.
Notably, numerous Chinese citizens are boycotting mortgages because they are not getting possession of their accommodation units on time.
Cash-strapped builders are not in a position to complete projects. The primary cause behind the housing crisis is that house buyers are not confident and don't trust that their housing units will be completed.
The housing sector is an essential sector of the Chinese economy as new home purchases constitute over 80 per cent of China's property industry.
Even though the country is investing in commercial projects to gain a geo-strategic advantage, the recipient countries are now registering debt defaults and are unable to pay back the Chinese companies' debts, the article read. (ANI)