Demand contraction and supply shock | Economic newspaper

It is not expected that China will make great strides in development in the near future. The Chinese government in Beijing follows its economic policy on this basis, in order to avoid any optimistic indicators that negatively affect the general situation. It seems clear that the Chinese legislators are working according to the data that is actually on the ground, although the Chinese economy will achieve significant growth this year, according to the monitored expectations, compared to the rest of the other major economies, although this growth is much less than it was in the period preceding the Corona pandemic, and that growth in major economies will remain modest, perhaps until the middle of the current decade, as a result of the pressures they are still facing, at a time when these pressures will remain present in the global economy for a period that will not be short.
Development in China faces three obstacles, according to lawmakers in Beijing, foremost of which is the shrinkage of global demand, for well-known reasons directly related to the current economic problems of importing countries from China, especially the continued increase in consumer prices in them, or their survival at high levels. Besides of course supply shock at the moment, with poor expectations. Chinese officials believe that these factors must be addressed in order to ensure a return to acceptable levels of development nationwide. The problem is somewhat deeper on the Chinese mainland, with urban employment declining for the first time in six decades, and this is a disturbing indicator and its negative impact on the economy, in addition to the decline in per capita spending, with direct effects from the strict restrictions imposed by the government in Beijing, To besiege the effects left by the global pandemic.
There is no doubt that these restrictions were the first and most important reason for the decline in growth expectations, although growth in China will, according to accredited international institutions, be a major engine of global growth, with a contribution of more than a quarter of this growth by the end of this year. The health restrictions have left their effects, which require movement in all sectors in order to secure an acceptable level of growth for the government, which has set a minimum level of 5 percent, but it does not seem that it will achieve this goal, at least this year. But the issue is not only related to a country like China, as the growth threats afflicted “and still are” many large countries, including the United States, in which there is increasing talk about the possibility of it slipping into recession, despite some expectations, which indicate the possibility that the largest economy will achieve Year in year growth this year up to 1.4 per cent.
There is no doubt that the Chinese economy can overcome the current stage, but in a not short period of time. A return to pre-corona growth is possible in the long run. This requires not only a new strong movement in the Chinese arena, but also the need for global demand to return to what it was in the past decade. This demand is still below the level, as a result of the various economic pressures in this or that country. Development in China and other countries, which seek enhanced growth for economic mobility in general, cannot be separated from the global economic situation, which is still going through a period of uncertainty, despite some positive indicators that have recently appeared, including the decline in turmoil in chains Supply, and maintain high levels of interest to curb inflation.