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Floundering economy presents a big problem for Beijing
August 26, 2022
|The Guardian Weekly
In his tour of the southern Chinese city of Shenzhen last week, Li Keqiang, the premier, tried to send some positive energy at a time when many citizens have been complaining of hardship.
"China's opening will continue. The Yellow river and the Yangtze river will not flow backward," Li said, while visiting Yantian Port, a gateway to Europe and North America, two of China's biggest markets. Covid rules shut the port last year, delaying deliveries over Christmas. This spring, similar restrictions forced vessels to queue to enter.
Since the start of this year, China's insistence on a zero-Covid policy has caused inconvenience and uncertainty for its people and the struggling economy, prompting grave concerns inside the country about what comes next.
"The property sector is ailing, investments are all falling, and people are saving rather than spending,” says Hong Hao , a market analyst whose social media account was censored this year after downbeat remarks about the economic outlook.
Hong highlights three big headaches for Beijing policymakers: Covid, property and troubling relations with major western countries. These stumbling blocks will almost certainly lead to China missing its economic growth target of “around 5.5%” this year, which Li set in March. Also worrying , the July unemployment rate among 16 to 24 -year-olds reached a record 19.9%, according to the National Bureau of Statistics.
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