2023-08-10 17:33:40
The Chinese economy is struggling to restart following the health crisis. The country even went into deflation for the first time since 2021.
China is idling. Between sluggish consumption, growth below forecasts, a decline in exports and now an entry into deflation, the Chinese economy is struggling to restart. Despite the relative confidence of the markets, the indicators “are rather bad” and “send a fairly alarmist message”, said Christopher Dembik, director of macroeconomic research for Saxo Bank, on BFM Business.
The Chinese economy is “massive” and it will be difficult to restart it without a substantial “stimulus”, but China “is not going in that direction”, argues Christopher Dembik. In addition to the “debt problem”, it is in particular the “restructuring of the real estate sector”, “an extremely important engine of growth in China”, which weighs on the country’s activity, he analyzes. Added to this are rising labor costs and geopolitical considerations.
“Many companies choose not to invest in China anymore because of fears surrounding the situation in Taiwan, assures Christopher Dembik.
A business “awakening”
On the investor side, “we must rather stay away from China today,” he says. In the wake of the health crisis, then tensions with Russia due to the war in Ukraine, risk “has become an integral part” of corporate strategy. At present, continues Christopher Dembik, “to be heavily exposed to China, especially in the field of supply chains, this poses a problem”.
According to him, “there has been an awakening of big companies, following a sort of somewhat blissful globalization, where we said to ourselves that business dominates despite everything”.
Jérémy Bruno Journalist BFMTV
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