As 2023 draws to a close, disinflation appears to be the norm, except in China, where deflation continues to defy forecasts as cost pressures continue to surprise. The difference with the start of the year is stark. Consider US consumer prices, which rose at an annual pace of 6.5% in January and 6.4% in February before falling to 3.1% in November.

Deflation in China impacting global disinflation efforts

The economic crisis in China deepens, with retail investors abandoning mutual funds in favour of hoarding cash. Investors are disillusioned with the performance of China's mutual funds this year. Previously, mutual funds were the favoured investment vehicle for investors.

Flows into new China stock funds plunge to lowest in decade

Amid an ongoing real estate crisis, a privately run aluminium producer in Guangdong, China's manufacturing hub, has thrust the challenges faced by private businesses into the spotlight. Golden World Innovation Aluminium, overwhelmed by the economic headwinds, has suspended production, compelling its staff to take five months of leave with reduced salaries, the South China Morning Post reported.<o:p></o:p>

Unemployment pressures mount despite official figures<o:p></o:p>

China's economy showed few positive signs in 2023, defying support measures and putting significant pressure on employment. Official unemployment figures remain within the government target of 5.5 per cent, but signs of companies implementing unpaid leave or reductions indicate underlying challenges. Analysts call for more policy support to revive domestic demand and stabilise manufacturing production. The Foshan government's labour market report in November pointed to hefty pressure on manufacturing industries due to economic headwinds.<o:p></o:p>

Private sector struggles impact China's economic growth<o:p></o:p>

The private sector, historically the backbone of China's economic growth, is yet to fully recover. Fixed-asset investment in the private sector contracted by 0.5 per cent in the first 11 months of the year, in contrast to a rise of 6.5 per cent in the state sector. <o:p></o:p>

Golden World Innovation Aluminium, once thriving during the property sector's heyday, is now grappling with declining orders amid the real estate crisis. The slump has become a major drag on the economy, affecting various sectors.<o:p></o:p>

Real estate crisis hits multiple sectors<o:p></o:p>

The slump in the real estate market has had a cascading effect on industries beyond aluminium production. Yaxin Iron and Steel Group in Henan announced a suspension of production, and Raymond Zheng, owner of a piling company, placed most of his staff on unpaid leave. <o:p></o:p>

The funding chain in various industries is broken, leading to solvency problems and compromising the quality of construction projects. Despite these widespread issues, China is still on track to meet its growth target for the year.<o:p></o:p>

Challenges persist despite economic growth pledges<o:p></o:p>

China's top leadership, at the central economic work conference, emphasised development as the top political priority and pledged efforts to consolidate economic growth. However, challenges such as high youth unemployment, weak business expectations, a drop in exports, a bleak manufacturing sector recovery, and rising local government debts loom large.<o:p></o:p>

According to the South China Morning Post, Peng Peng, the executive chairman of the Guangdong Society of Reform, urged increased supportive policies to address the severity of the economic situation.<o:p></o:p>

Wide-ranging impact on various sectors<o:p></o:p>

The economic slowdown is not confined to specific industries; electronics, plastics producers, and the printing industry have also felt the pinch. Simatelex, a Hong Kong-based electronics producer, closed its Shenzhen factory after 38 years, affecting hundreds of workers. <o:p></o:p>

Plastics manufacturers Shenli and Forward, as well as Good Printing, have closed their Shenzhen factories, impacting thousands of jobs. The closures have not only economic ramifications but also affect nearby businesses relying on the workers.<o:p></o:p>

China struggles to replace real estate as economic pillar<o:p></o:p>

The challenge lies in finding emerging industries powerful enough to replace real estate as a pillar for the national economy. Paris-based investment bank Natixis highlights this concern, emphasising that China has yet to identify industries capable of filling the void left by the real estate sector. <o:p></o:p>

The Guangzhou Institute of Greater Bay Area warns of investment conditions' deterioration and funding difficulties for private businesses in 2024 if confidence is not revived.<o:p></o:p>

Policy room available, but challenges loom<o:p></o:p>

While China maintains a growth target for the year, concerns persist about a protracted weakness in private investment. A report by the Guangzhou Institute of Greater Bay Area urges caution, stating that if confidence isn't revived, private entrepreneurs may continue to face challenges.<o:p></o:p>

&nbsp;Xu Qiyuan from the Chinese Academy of Social Sciences emphasised the need for additional gauges beyond the urban surveyed unemployment rate to better reflect the real job pressures.

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Amid an ongoing real estate crisis, a privately run aluminium producer in Guangdong, China's manufacturing hub, has thrust the challenges faced by private businesses into the spotlight.

Amid an ongoing real estate crisis, a privately run aluminium producer in Guangdong, China's manufacturing hub, has thrust the challenges faced by private businesses into the spotlight. Golden World Innovation Aluminium, overwhelmed by the economic headwinds, has suspended production, compelling its staff to take five months of leave with reduced salaries, the South China Morning Post reported. Unemployment pressures mount despite official figures China's economy showed few positive signs in 2023, defying support measures and putting significant pressure on employment. Official unemployment figures remain within the government target of 5.5 per cent, but signs of companies implementing unpaid leave or reductions indicate underlying challenges. Analysts call for more policy support to revive domestic demand and stabilise manufacturing production. The Foshan government's labour market report in November pointed to hefty pressure on manufacturing industries due to economic headwinds. Private sector struggles impact China's economic growth The private sector, historically the backbone of China's economic growth, is yet to fully recover. Fixed-asset investment in the private sector contracted by 0.5 per cent in the first 11 months of the year, in contrast to a rise of 6.5 per cent in the state sector. Golden World Innovation Aluminium, once thriving during the property sector's heyday, is now grappling with declining orders amid the real estate crisis. The slump has become a major drag on the economy, affecting various sectors. Real estate crisis hits multiple sectors The slump in the real estate market has had a cascading effect on industries beyond aluminium production. Yaxin Iron and Steel Group in Henan announced a suspension of production, and Raymond Zheng, owner of a piling company, placed most of his staff on unpaid leave. The funding chain in various industries is broken, leading to solvency problems and compromising the quality of construction projects. Despite these widespread issues, China is still on track to meet its growth target for the year. Challenges persist despite economic growth pledges China's top leadership, at the central economic work conference, emphasised development as the top political priority and pledged efforts to consolidate economic growth. However, challenges such as high youth unemployment, weak business expectations, a drop in exports, a bleak manufacturing sector recovery, and rising local government debts loom large. According to the South China Morning Post, Peng Peng, the executive chairman of the Guangdong Society of Reform, urged increased supportive policies to address the severity of the economic situation. Wide-ranging impact on various sectors The economic slowdown is not confined to specific industries; electronics, plastics producers, and the printing industry have also felt the pinch. Simatelex, a Hong Kong-based electronics producer, closed its Shenzhen factory after 38 years, affecting hundreds of workers. Plastics manufacturers Shenli and Forward, as well as Good Printing, have closed their Shenzhen factories, impacting thousands of jobs. The closures have not only economic ramifications but also affect nearby businesses relying on the workers. China struggles to replace real estate as economic pillar The challenge lies in finding emerging industries powerful enough to replace real estate as a pillar for the national economy. Paris-based investment bank Natixis highlights this concern, emphasising that China has yet to identify industries capable of filling the void left by the real estate sector. The Guangzhou Institute of Greater Bay Area warns of investment conditions' deterioration and funding difficulties for private businesses in 2024 if confidence is not revived. Policy room available, but challenges loom While China maintains a growth target for the year, concerns persist about a protracted weakness in private investment. A report by the Guangzhou Institute of Greater Bay Area urges caution, stating that if confidence isn't revived, private entrepreneurs may continue to face challenges. Xu Qiyuan from the Chinese Academy of Social Sciences emphasised the need for additional gauges beyond the urban surveyed unemployment rate to better reflect the real job pressures. WATCH WION LIVE HERE

China's economic woes deepen as private sector struggles with challenges surrounding unemployment

There's no good news for the Chinese economy. The world bank has said that china's recovery remains fragile. The economy will continue to slow next year. That's despite more investments into factories & a boost to service sector demand. China's growth will fall from 5.2 this year to 4.5% next year.

World Bank on China's economy

President Xi Jinping and other senior chinese officials pledged to prioritise industrial strategy above stimulus spending in the next year, that is sure to disappoint investors.

China's economic focus shifts to AI amid US Tensions | World Business Watch

Young people in China find themselves disproportionately affected by a burgeoning unemployment crisis, with one in five facing joblessness. This reversal underscores the evolving challenges within China's economic landscape, signalling a new reality where the once-booming job market for the youth is giving way to increased difficulties in securing employment.

China's urban population decline & GDP slowdown

In a move indicative of China's growing scrutiny on financial institutions, China International Capital Corp. (CICC), one of the country's largest investment banks, has issued internal directives prohibiting its analysts from making bearish calls on the economy or markets. <o:p></o:p>

The memo, obtained by Bloomberg News,&nbsp;warns analysts against revealing compensation and restricts the wearing of luxury brands. This clampdown comes in the wake of Beijing's efforts to align the financial industry with President Xi Jinping's "common prosperity" initiative and curtail ostentatious behaviour among bankers.<o:p></o:p>

Analysts at CICC are now under strict guidelines to exercise caution when sharing views with clients outside China, with an emphasis on reducing national security and political risks. The bank has urged analysts to conduct due diligence on experts invited to conferences and deal pitches. <o:p></o:p>

This move reflects a broader trend, with at least two other major investment banks in China providing verbal guidance to analysts, discouraging negative comments on the domestic economy or discussions about compensation. The atmosphere has made it challenging for financial conference organisers to secure speakers willing to share candid views on the Chinese economy.<o:p></o:p>

CICC's internal memo goes beyond market analysis, encompassing conduct guidelines for various aspects, including client engagement, social media use, and expense reimbursement. Amid slumping profits and a leadership reshuffle, CICC has implemented cost-cutting measures. <o:p></o:p>

The document strictly controls business-related expenses, including analysts being discouraged from taking taxis home after road shows and ordering drinks at business banquets. Earlier this year, the bank reduced senior bankers' compensation by over 40 per cent and scaled back travel perks.<o:p></o:p>

As China's parliament signals the possibility of further profit declines in the financial industry and regulators press banks to support the stressed property sector, the challenges for bankers in China may intensify. A coalition of 19 Chinese brokerages, including JPMorgan Chase &amp; Co. and Morgan Stanley's local ventures, recently pledged to combat corruption in their investment-bank businesses. <o:p></o:p>

President Xi's ongoing anti-graft campaign has already resulted in the removal of over 100 senior financial executives and officials this year alone. While China aims to restore investor confidence in its economy and markets, its historic crackdown on information deemed harmful is likely to persist.<o:p></o:p>

The memo reveals additional restrictions imposed on CICC analysts, emphasising discretion in social media commentary, avoidance of politically sensitive content, and active participation in party-building activities. Analysts are instructed to refrain from making comments inconsistent with government policies, sharing unpublished views on social media platforms like WeChat, and to ensure that family members abide by basic moral standards. Furthermore, analysts are cautioned against using their full per diem allowance on meals when working overtime.<o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

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In a move indicative of China's growing scrutiny on financial institutions, China International Capital Corp. (CICC), one of the country's largest investment banks, has issued internal directives prohibiting its analysts from making bearish calls on the economy or markets.

In a move indicative of China's growing scrutiny on financial institutions, China International Capital Corp. (CICC), one of the country's largest investment banks, has issued internal directives prohibiting its analysts from making bearish calls on the economy or markets. The memo, obtained by Bloomberg News, warns analysts against revealing compensation and restricts the wearing of luxury brands. This clampdown comes in the wake of Beijing's efforts to align the financial industry with President Xi Jinping's "common prosperity" initiative and curtail ostentatious behaviour among bankers. Analysts at CICC are now under strict guidelines to exercise caution when sharing views with clients outside China, with an emphasis on reducing national security and political risks. The bank has urged analysts to conduct due diligence on experts invited to conferences and deal pitches. This move reflects a broader trend, with at least two other major investment banks in China providing verbal guidance to analysts, discouraging negative comments on the domestic economy or discussions about compensation. The atmosphere has made it challenging for financial conference organisers to secure speakers willing to share candid views on the Chinese economy. CICC's internal memo goes beyond market analysis, encompassing conduct guidelines for various aspects, including client engagement, social media use, and expense reimbursement. Amid slumping profits and a leadership reshuffle, CICC has implemented cost-cutting measures. The document strictly controls business-related expenses, including analysts being discouraged from taking taxis home after road shows and ordering drinks at business banquets. Earlier this year, the bank reduced senior bankers' compensation by over 40 per cent and scaled back travel perks. As China's parliament signals the possibility of further profit declines in the financial industry and regulators press banks to support the stressed property sector, the challenges for bankers in China may intensify. A coalition of 19 Chinese brokerages, including JPMorgan Chase & Co. and Morgan Stanley's local ventures, recently pledged to combat corruption in their investment-bank businesses. President Xi's ongoing anti-graft campaign has already resulted in the removal of over 100 senior financial executives and officials this year alone. While China aims to restore investor confidence in its economy and markets, its historic crackdown on information deemed harmful is likely to persist. The memo reveals additional restrictions imposed on CICC analysts, emphasising discretion in social media commentary, avoidance of politically sensitive content, and active participation in party-building activities. Analysts are instructed to refrain from making comments inconsistent with government policies, sharing unpublished views on social media platforms like WeChat, and to ensure that family members abide by basic moral standards. Furthermore, analysts are cautioned against using their full per diem allowance on meals when working overtime. (With inputs from Bloomberg) WATCH WION LIVE HERE

China investment bank enforces strict measures on analysts amid regulatory crackdown

Asia-Pacific countries, led by emerging economies, continue to show resilience amid the downturn in the Chinese economy, according to the latest economic outlook by S&amp;P Global Ratings.

"Outside of China, economies have generally held up well. Asia-Pacific continues to grow despite meagre support from external sources," says the report.

China's economic struggle to continue

China, the central figure of the region's economy, is still reeling from the downturn in the property sector. However, the report suggests that growth momentum has "slightly improved" because of policy support.

The world's second-biggest economy has announced several measures to support the property sector, constituting a quarter of China's economic output.

In addition, the Xi Jinping administration has also taken other steps to revitalise the larger economy, including approval of a $137 billion sovereign bond issue and allowing local governments to frontload part of their 2024 bond quotas.

However, more than these measures may be needed for China to escape the economic downturn.

The report predicts that China's economic growth will be 5.4 per cent in 2023. But it will fall to 4.6 per cent in 2024. Interestingly, these figures align with the International Monetary Fund's forecast for 2023 and 2024.

"Our GDP growth forecast for 2024 suggests the slack in the economy that is weighing on profit margins and prices in many sectors in China's economy will persist next year," notes the report.

Asia-Pacific region shows resilience.

While the overall picture is not rosy, the Asia Pacific region has been able to withstand the global economic slowdown.

The region is expected to grow by 4.7 per cent in 2023, just 0.1 per cent higher than the IMF forecast of 4.6 per cent growth.

Next year, growth is likely to fall to 4.4 per cent, according to the report.

Emerging economies are the region's stars, with India, Indonesia, Malaysia, and the Philippines standing out from the rest due to strong domestic demand.

"Growth this year and next is on track to be the strongest in emerging market economies," says the report.

It also notes that India will continue to grow by 6.4 per cent in 2024, remaining the fastest-growing emerging economy in the region.

Developed economies like Japan, South Korea and Taiwan have been able to withstand the downturn through robust labour markets and service sectors.

One big catalyst for these developed economies has been the surge in the semiconductor sector, which is likely to remain strong next year, too.

Nevertheless, growth in the Asia Pacific region will be the lowest among developed countries for two reasons: weak global trade and high-interest rates.

The larger outlook

The report says that risks remain for the Asia-Pacific region.

A lot will depend on the economic trajectory embarked on by China and Europe in 2024.

Any unexpected increases in inflation in the United States will force the Federal Reserve to continue with its tight monetary policy, exacerbating the pressure on Asian currencies and markets.

Geopolitical risks emanating from the Ukraine war and tensions in West Asia will likely continue impacting commodity and energy prices.

This will stoke inflation, increase external deficits, and trigger a domino effect on the world economy.

"Risks remain, but so too does the potential for growth in the region," the report ends on a positive note. &nbsp;

Asia-Pacific countries, led by emerging economies, continue to show resilience amid the downturn in the Chinese economy, according to the latest economic outlook by S&P Global Ratings.

Asia-Pacific countries, led by emerging economies, continue to show resilience amid the downturn in the Chinese economy, according to the latest economic outlook by S&P Global Ratings. "Outside of China, economies have generally held up well. Asia-Pacific continues to grow despite meagre support from external sources," says the report. China's economic struggle to continue China, the central figure of the region's economy, is still reeling from the downturn in the property sector. However, the report suggests that growth momentum has "slightly improved" because of policy support. The world's second-biggest economy has announced several measures to support the property sector, constituting a quarter of China's economic output. In addition, the Xi Jinping administration has also taken other steps to revitalise the larger economy, including approval of a $137 billion sovereign bond issue and allowing local governments to frontload part of their 2024 bond quotas. However, more than these measures may be needed for China to escape the economic downturn. The report predicts that China's economic growth will be 5.4 per cent in 2023. But it will fall to 4.6 per cent in 2024. Interestingly, these figures align with the International Monetary Fund's forecast for 2023 and 2024. "Our GDP growth forecast for 2024 suggests the slack in the economy that is weighing on profit margins and prices in many sectors in China's economy will persist next year," notes the report. Asia-Pacific region shows resilience. While the overall picture is not rosy, the Asia Pacific region has been able to withstand the global economic slowdown. The region is expected to grow by 4.7 per cent in 2023, just 0.1 per cent higher than the IMF forecast of 4.6 per cent growth. Next year, growth is likely to fall to 4.4 per cent, according to the report. Emerging economies are the region's stars, with India, Indonesia, Malaysia, and the Philippines standing out from the rest due to strong domestic demand. "Growth this year and next is on track to be the strongest in emerging market economies," says the report. It also notes that India will continue to grow by 6.4 per cent in 2024, remaining the fastest-growing emerging economy in the region. Developed economies like Japan, South Korea and Taiwan have been able to withstand the downturn through robust labour markets and service sectors. One big catalyst for these developed economies has been the surge in the semiconductor sector, which is likely to remain strong next year, too. Nevertheless, growth in the Asia Pacific region will be the lowest among developed countries for two reasons: weak global trade and high-interest rates. The larger outlook The report says that risks remain for the Asia-Pacific region. A lot will depend on the economic trajectory embarked on by China and Europe in 2024. Any unexpected increases in inflation in the United States will force the Federal Reserve to continue with its tight monetary policy, exacerbating the pressure on Asian currencies and markets. Geopolitical risks emanating from the Ukraine war and tensions in West Asia will likely continue impacting commodity and energy prices. This will stoke inflation, increase external deficits, and trigger a domino effect on the world economy. "Risks remain, but so too does the potential for growth in the region," the report ends on a positive note.

Emerging economies will be the stars of the Asia-Pacific region. Here's why

S&P global ratings' latest economic outlook shows that the region has surprisingly held up well, even amid the global economic downturn and china's property crisis. The property downturn will continue to remain a pain point for china's economy. While growth momentum has slightly improved because of policy support, the report is not good news for china. The credit rating agency pegs china's growth at 5.4% in 2023, but it will slow to 4.6% in 2024.

Report: Asia-Pacific region holding up well despite China crisis

In a quarterly policy report, the bank outlines precise and forceful measures to tackle challenges, emphasizing resilience in the face of a changing global landscape. The central bank's quarterly report reveals a multifaceted strategy, focusing on cross-cyclical and countercyclical adjustments. Aiming to enrich its monetary policy toolbox, the bank emphasizes the need for a stable financial environment. Challenges include an imbalanced global economic recovery, an unstable foundation for domestic economic recovery, and significant shifts in the property market dynamics. The bank acknowledges these hurdles as it launches targeted monetary policies to support domestic demand.

China's Central Bank unveils bold measures to safeguard economy

Bad news continues to emerge from China's struggling economy. In what could be signs of the property sector crisis spiralling into a larger catastrophe for the economy, leading wealth manager Zhongzhi group declared itself heavily insolvent.

Leading wealth manager Zhongzhi group declares insolvency

China's industrial output and retail sales growth beat expectations in October. However, there are significant weaknesses, with the property sector preventing a full-blown revival.

China's output and sales growth beat estimates in October | World Business Watch

Foreign businesses are swiftly retracting their investments from China, signalling a paradigm shift in the global economic landscape. The unprecedented $11.8 billion deficit in foreign investment, a stark departure from the country's historical trends, is raising eyebrows and prompting a closer examination of the factors at play.

Factors at play

Several factors contribute to this investment exodus. A cocktail of China's slowing economy, low-interest rates, and an escalating geopolitical tussle with the U.S. are casting shadows of doubt over the country's economic potential. Businesses, facing uncertainties on multiple fronts, are erring on the side of caution, leading to a reassessment of their engagement with the world's second-largest economy.

Geopolitical risks, domestic policy uncertainties, and concerns about slower growth are driving foreign companies to explore alternative markets. Strict pandemic lockdowns under China's 'zero-Covid' policy have disrupted supply chains for multinational corporations, further fueling the decision to diversify investments. While established multinational firms remain in the Chinese market, new investments are under scrutiny, reflecting a shift in the global economic landscape.

Insights and Themes

Beyond the immediate data, deeper insights emerge. The tensions between China and the U.S. have led to fresh export restrictions, impacting the supply chain dynamics for major companies like Apple. Diversification becomes not just a strategy but a necessity, prompting businesses to rethink their dependence on a single market. The story transcends a mere economic shift; it is a reflection of the evolving dynamics in global trade relationships and the delicate dance between economic giants.

Moreover, interest rates play a crucial role in this narrative. While global counterparts raise rates to combat inflation, China, in an unconventional move, lowers interest rates to support its economy. This, coupled with a depreciating yuan, prompts businesses to redirect their excess cash and earnings overseas, seeking higher investment returns.

As the world anticipates a crucial meeting between Chinese leader Xi Jinping and U.S. President Joe Biden, businesses remain cautiously optimistic. The diplomatic engagement witnessed over the past months hints at a desire to stabilise the relationship between the two economic powerhouses. However, the intricate web of economic uncertainties and geopolitical dynamics continues to cast a shadow on foreign investment in China.

Bottomline

The story of foreign businesses withdrawing from China is not just a statistical blip but a reflection of the intricate dance between economic giants. As the world watches these developments unfold, the outcomes of crucial diplomatic engagements and the economic strategies employed by nations will undoubtedly shape the trajectory of global investments in the post-pandemic era.

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Foreign businesses are swiftly retracting their investments from China, signalling a paradigm shift in the global economic landscape. The unprecedented $11.8 billion deficit in foreign investment, a stark departure from the country's historical trends, is raising eyebrows and prompting a closer examination of the factors at play.

Foreign businesses are swiftly retracting their investments from China, signalling a paradigm shift in the global economic landscape. The unprecedented $11.8 billion deficit in foreign investment, a stark departure from the country's historical trends, is raising eyebrows and prompting a closer examination of the factors at play. Factors at play Several factors contribute to this investment exodus. A cocktail of China's slowing economy, low-interest rates, and an escalating geopolitical tussle with the U.S. are casting shadows of doubt over the country's economic potential. Businesses, facing uncertainties on multiple fronts, are erring on the side of caution, leading to a reassessment of their engagement with the world's second-largest economy. Geopolitical risks, domestic policy uncertainties, and concerns about slower growth are driving foreign companies to explore alternative markets. Strict pandemic lockdowns under China's 'zero-Covid' policy have disrupted supply chains for multinational corporations, further fueling the decision to diversify investments. While established multinational firms remain in the Chinese market, new investments are under scrutiny, reflecting a shift in the global economic landscape. Insights and Themes Beyond the immediate data, deeper insights emerge. The tensions between China and the U.S. have led to fresh export restrictions, impacting the supply chain dynamics for major companies like Apple. Diversification becomes not just a strategy but a necessity, prompting businesses to rethink their dependence on a single market. The story transcends a mere economic shift; it is a reflection of the evolving dynamics in global trade relationships and the delicate dance between economic giants. Moreover, interest rates play a crucial role in this narrative. While global counterparts raise rates to combat inflation, China, in an unconventional move, lowers interest rates to support its economy. This, coupled with a depreciating yuan, prompts businesses to redirect their excess cash and earnings overseas, seeking higher investment returns. As the world anticipates a crucial meeting between Chinese leader Xi Jinping and U.S. President Joe Biden, businesses remain cautiously optimistic. The diplomatic engagement witnessed over the past months hints at a desire to stabilise the relationship between the two economic powerhouses. However, the intricate web of economic uncertainties and geopolitical dynamics continues to cast a shadow on foreign investment in China. Bottomline The story of foreign businesses withdrawing from China is not just a statistical blip but a reflection of the intricate dance between economic giants. As the world watches these developments unfold, the outcomes of crucial diplomatic engagements and the economic strategies employed by nations will undoubtedly shape the trajectory of global investments in the post-pandemic era. WATCH WION LIVE HERE

China sees an investment exodus as global players pivot

China has once again slipped into deflation in October, drawing attention to the challenges the country faces in stabilising growth through domestic demand. According to a report by Bloomberg, The National Bureau of Statistics reported a 0.2 per cent decline in consumer prices last month, contrary to expectations, following two months of near-zero inflation. &nbsp;

Producer prices also extended their decline for the 13th consecutive month, dropping 2.6 per cent, slightly better than the estimated 2.7 per cent decline. The struggle to spur growth through internal consumption is evident, and the recent data challenges the earlier optimism expressed by the People's Bank of China about a rebound in prices after a challenging summer.&nbsp;

China's inflationary woes in 2023 are rooted in both domestic and international factors. A housing slump, weakened consumer confidence, and a significant drop in global commodity prices from the highs of the previous year contribute to the nation's low inflation rate.&nbsp;

Additionally, the subdued demand for Chinese goods on the international stage has led to declining exports. The delicate balance required for a strong economic recovery continues to elude China, posing challenges for policymakers grappling with the complexities of both local and global economic dynamics. &nbsp;

The ongoing struggles in China's consumer price index are particularly pronounced, with deflationary pressures surfacing in July and persisting throughout the year. &nbsp;

While The People's Bank of China had expressed confidence in a rebound, the latest data suggests a more challenging reality. Moreover, the offshore yuan and Chinese 10-year government bond yields remained relatively stable immediately after the release of the deflationary figures.&nbsp;

However, the broader implications of this economic scenario raise concerns about the effectiveness of policy measures in fostering a sustained recovery. &nbsp;

(With inputs from Bloomberg)&nbsp;

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China has once again slipped into deflation in October, drawing attention to the challenges the country faces in stabilising growth through domestic demand. According to a report by Bloomberg, The National Bureau of Statistics reported a 0.

China has once again slipped into deflation in October, drawing attention to the challenges the country faces in stabilising growth through domestic demand. According to a report by Bloomberg, The National Bureau of Statistics reported a 0.2 per cent decline in consumer prices last month, contrary to expectations, following two months of near-zero inflation. Producer prices also extended their decline for the 13th consecutive month, dropping 2.6 per cent, slightly better than the estimated 2.7 per cent decline. The struggle to spur growth through internal consumption is evident, and the recent data challenges the earlier optimism expressed by the People's Bank of China about a rebound in prices after a challenging summer. China's inflationary woes in 2023 are rooted in both domestic and international factors. A housing slump, weakened consumer confidence, and a significant drop in global commodity prices from the highs of the previous year contribute to the nation's low inflation rate. Additionally, the subdued demand for Chinese goods on the international stage has led to declining exports. The delicate balance required for a strong economic recovery continues to elude China, posing challenges for policymakers grappling with the complexities of both local and global economic dynamics. The ongoing struggles in China's consumer price index are particularly pronounced, with deflationary pressures surfacing in July and persisting throughout the year. While The People's Bank of China had expressed confidence in a rebound, the latest data suggests a more challenging reality. Moreover, the offshore yuan and Chinese 10-year government bond yields remained relatively stable immediately after the release of the deflationary figures. However, the broader implications of this economic scenario raise concerns about the effectiveness of policy measures in fostering a sustained recovery. (With inputs from Bloomberg) WATCH WION LIVE HERE

China slips into deflation as economic headwinds persist 

The International Monetary Fund (IMF) on Tuesday&nbsp;upgraded its growth forecasts for China, indicating that the country's economy is set to expand by 5.4 per cent this year, reflecting a robust Post-Covid recovery. &nbsp;

This upward revision comes after the IMF's previous forecast of 5 per cent growth, Reuters reported. &nbsp;

However, the IMF anticipates slower growth in 2024, with concerns centred around the lingering weakness in the property sector and subdued external demand, potentially limiting gross domestic product (GDP) growth to 4.6 per cent. Nonetheless, this revised projection remains more favourable than the 4.2 per cent forecast in the IMF's World Economic Outlook (WEO) published in October.&nbsp;

The IMF's decision to upgrade China's growth prospects for 2023 and 2024 is influenced by recent policy actions taken by China, including the approval of a 1 trillion-yuan ($137 billion) sovereign bond issue and the facilitation of local governments to frontload a portion of their 2024 bond quotas. &nbsp;

These measures are aimed at providing additional support to the Chinese economy in its path to recovery. &nbsp;

Reuters quoted Gita Gopinath, the IMF's First Deputy Managing Director, as saying, "We have revised up growth by 0.4 percentage points in both years relative to our October WEO projections, reflecting stronger than expected growth in the third quarter and the new policy support that was recently announced."&nbsp;

While recognising China's strong economic recovery, Gopinath also emphasised the need for additional measures in the property sector to secure a quicker and more sustainable recovery. Addressing the real estate sector, she highlighted the importance of accelerating the exit of non-viable property developers, removing obstacles to housing price adjustments, and increasing central government funding for housing completion as part of the policy package. &nbsp;

These measures are seen as essential for bringing the property sector to a more sustainable size and minimising economic costs. The property sector, combined with the local government debt crunch, poses challenges to China's long-term growth potential, according to economists.&nbsp;

Local government debt in China has surged to 92 trillion yuan ($12.6 trillion), equivalent to 76 per cent of China's economic output in 2022, a significant increase from 62.2 per cent in 2019. In response, the Politburo, a top decision-making body of the ruling Communist Party, pledged in late July to introduce measures to reduce local government debt risks. &nbsp;

Gopinath called for coordinated fiscal framework reforms and balance-sheet restructuring at the central government level to address local government debt strains, close fiscal gaps, and control the flow of debt.

Furthermore, she stressed the necessity of a comprehensive strategy to reduce the debt level of local government financing vehicles (LGFVs), which were originally established to fund infrastructure investments but now present a substantial risk to China's slowing economy, with their combined debt reaching approximately $9 trillion.&nbsp;

To mitigate financial stability risks, Gopinath underlined the importance of improving fiscal transparency and risk monitoring at the local government level. She warned that "financial stability risks are elevated and still rising," highlighting the significance of proactive measures to prevent the emergence of new vulnerabilities in the Chinese economy.&nbsp;

(Inputs from Reuters)&nbsp;

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The International Monetary Fund (IMF) on Tuesday upgraded its growth forecasts for China, indicating that the country's economy is set to expand by 5.4 per cent this year, reflecting a robust Post-Covid recovery.

The International Monetary Fund (IMF) on Tuesday upgraded its growth forecasts for China, indicating that the country's economy is set to expand by 5.4 per cent this year, reflecting a robust Post-Covid recovery. This upward revision comes after the IMF's previous forecast of 5 per cent growth, Reuters reported. However, the IMF anticipates slower growth in 2024, with concerns centred around the lingering weakness in the property sector and subdued external demand, potentially limiting gross domestic product (GDP) growth to 4.6 per cent. Nonetheless, this revised projection remains more favourable than the 4.2 per cent forecast in the IMF's World Economic Outlook (WEO) published in October. The IMF's decision to upgrade China's growth prospects for 2023 and 2024 is influenced by recent policy actions taken by China, including the approval of a 1 trillion-yuan ($137 billion) sovereign bond issue and the facilitation of local governments to frontload a portion of their 2024 bond quotas. These measures are aimed at providing additional support to the Chinese economy in its path to recovery. Reuters quoted Gita Gopinath, the IMF's First Deputy Managing Director, as saying, "We have revised up growth by 0.4 percentage points in both years relative to our October WEO projections, reflecting stronger than expected growth in the third quarter and the new policy support that was recently announced." While recognising China's strong economic recovery, Gopinath also emphasised the need for additional measures in the property sector to secure a quicker and more sustainable recovery. Addressing the real estate sector, she highlighted the importance of accelerating the exit of non-viable property developers, removing obstacles to housing price adjustments, and increasing central government funding for housing completion as part of the policy package. These measures are seen as essential for bringing the property sector to a more sustainable size and minimising economic costs. The property sector, combined with the local government debt crunch, poses challenges to China's long-term growth potential, according to economists. Local government debt in China has surged to 92 trillion yuan ($12.6 trillion), equivalent to 76 per cent of China's economic output in 2022, a significant increase from 62.2 per cent in 2019. In response, the Politburo, a top decision-making body of the ruling Communist Party, pledged in late July to introduce measures to reduce local government debt risks. Gopinath called for coordinated fiscal framework reforms and balance-sheet restructuring at the central government level to address local government debt strains, close fiscal gaps, and control the flow of debt. Furthermore, she stressed the necessity of a comprehensive strategy to reduce the debt level of local government financing vehicles (LGFVs), which were originally established to fund infrastructure investments but now present a substantial risk to China's slowing economy, with their combined debt reaching approximately $9 trillion. To mitigate financial stability risks, Gopinath underlined the importance of improving fiscal transparency and risk monitoring at the local government level. She warned that "financial stability risks are elevated and still rising," highlighting the significance of proactive measures to prevent the emergence of new vulnerabilities in the Chinese economy. (Inputs from Reuters) WATCH WION LIVE HERE

IMF raises China's 2023 and 2024 growth forecasts amid post-Covid recovery 

China's economic challenges are mounting as its manufacturing activity unexpectedly contracted in October.

The official purchasing managers' index fell to 49.5 in October from 50.2, dipping back below the 50-point level demarcating contraction from expansion. It missed a forecast of 50.2 and was worse than the most pessimistic prediction of 49.9 by a Reuters poll.

This decline underscores the formidable task facing Chinese policymakers as they grapple with a slew of domestic and global challenges.

While recent indicators had hinted at a stabilising economy, thanks to policy support measures, a prolonged property crisis and weak global demand continue to cast a shadow over China's prospects.

China's housing slump and a slowdown in infrastructure spending are contributing to this economic downturn. Weak demand, particularly from overseas, is causing manufacturers to struggle to find buyers and reduce orders for components used in finished goods for re-export. This, in turn, is eroding business profits and causing factory gate prices to contract sharply.

In the midst of this economic struggle, there's a growing sense that China's impressive growth story may be stagnating.

Meanwhile, an alternative economic powerhouse is emerging on the horizon. India, with its youthful population, entrepreneurial spirit, and a government committed to economic reforms, is positioned to offer a faster and more dynamic alternative.

As China grapples with stagnation, India's economy is poised to seize the opportunity to shine.

While China may require more policy support to meet its annual GDP target, India's economic potential is becoming increasingly evident.

Its diverse economy, burgeoning tech industry, and growing middle class make it a compelling alternative for investors and businesses looking to capitalise on Asia's growth story.

As China's economic challenges persist, India could emerge as the unexpected frontrunner, setting the stage for a new economic era in the region.

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China's economic challenges are mounting as its manufacturing activity unexpectedly contracted in October. The official purchasing managers' index fell to 49.5 in October from 50.

China's economic challenges are mounting as its manufacturing activity unexpectedly contracted in October. The official purchasing managers' index fell to 49.5 in October from 50.2, dipping back below the 50-point level demarcating contraction from expansion. It missed a forecast of 50.2 and was worse than the most pessimistic prediction of 49.9 by a Reuters poll. This decline underscores the formidable task facing Chinese policymakers as they grapple with a slew of domestic and global challenges. While recent indicators had hinted at a stabilising economy, thanks to policy support measures, a prolonged property crisis and weak global demand continue to cast a shadow over China's prospects. China's housing slump and a slowdown in infrastructure spending are contributing to this economic downturn. Weak demand, particularly from overseas, is causing manufacturers to struggle to find buyers and reduce orders for components used in finished goods for re-export. This, in turn, is eroding business profits and causing factory gate prices to contract sharply. In the midst of this economic struggle, there's a growing sense that China's impressive growth story may be stagnating. Meanwhile, an alternative economic powerhouse is emerging on the horizon. India, with its youthful population, entrepreneurial spirit, and a government committed to economic reforms, is positioned to offer a faster and more dynamic alternative. As China grapples with stagnation, India's economy is poised to seize the opportunity to shine. While China may require more policy support to meet its annual GDP target, India's economic potential is becoming increasingly evident. Its diverse economy, burgeoning tech industry, and growing middle class make it a compelling alternative for investors and businesses looking to capitalise on Asia's growth story. As China's economic challenges persist, India could emerge as the unexpected frontrunner, setting the stage for a new economic era in the region. WATCH WION LIVE HERE

Decoding state of China's economy: Business activity contracts in October

China has formally arrested a Japanese man detained in March on suspicion of espionage, Japan’s foreign ministry confirmed Thursday (Oct 19).&nbsp;

The man, who has been living in China for the last 20 years, was an employee of a Tokyo-based pharma company, Astellas Pharma.

“We have confirmed that the Japanese national in question has been arrested, but we have strongly appealed to the Chinese side for his early release through various levels and opportunities,” Japanese Chief Cabinet Secretary Hirokazu Matsuno said at a press conference.

<h2>China’s allegations</h2>

China accuses the Japanese man of violating the country’s strict criminal code. &nbsp;Chinese Foreign Ministry spokesperson Mao Ning said on Thursday that the Japanese citizen “was suspected of espionage and was subject to criminal compulsory measures taken by the relevant Chinese authorities in accordance with the law.”

Watch:&nbsp;China to have operational nukes by 2030? | World News | WION

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The Japanese authorities have not revealed more details about the detained person, including his name or the place where he is kept.

The development comes amidst an ongoing crackdown on international consulting firms on national security grounds in China.

<h2>Ramifications</h2>

China’s actions might end up further jeopardising economic environment in the world’s second-largest economy, which could further fuel the West’s decoupling from the communist nation.

In July, China imposed a fine of approximately $1.5 million on the Mintz Group, a US corporate due diligence firm, for purportedly engaging in unauthorised statistical activities within the country. As a consequence, Chinese officials shut down the group's Beijing office in March and apprehended five of its local staff members.

<a href="https://www.wionews.com/world/six-chinese-warships-were-operating-in-west-asia-amid-israel-hamas-tensions-649104">Also read:&nbsp;Six Chinese warships were operating in West Asia amid Israel-Hamas tensions</a>

In May, the state security authorities revealed that they had conducted raids on multiple offices of Capvision, an advisory network. This announcement came a month after law enforcement authorities had questioned employees at the Shanghai office of the consultancy firm Bain.

This situation has posed challenges for foreign businesses, some of which were already encountering difficulties in persuading their employees to relocate to China.

<h2>Falling FDI</h2>

As a result, foreign investors are dragging their feet on further investments in China. Foreign direct investment (FDI) in China fell 5.1 per cent from a year ago.

Direct investment liabilities, a measure of FDI reflected in a country’s balance of payments, fell to just $4.9 billion in the April to June months (the lowest since 1998), according to data published in August by the State Administration of Foreign Exchange.

(With inputs from agencies)

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&nbsp;

China has formally arrested a Japanese man detained in March on suspicion of espionage, Japan’s foreign ministry confirmed Thursday (Oct 19). The man, who has been living in China for the last 20 years, was an employee of a Tokyo-based pharma company, Astellas Pharma.

China has formally arrested a Japanese man detained in March on suspicion of espionage, Japan’s foreign ministry confirmed Thursday (Oct 19). The man, who has been living in China for the last 20 years, was an employee of a Tokyo-based pharma company, Astellas Pharma. “We have confirmed that the Japanese national in question has been arrested, but we have strongly appealed to the Chinese side for his early release through various levels and opportunities,” Japanese Chief Cabinet Secretary Hirokazu Matsuno said at a press conference. China’s allegations China accuses the Japanese man of violating the country’s strict criminal code. Chinese Foreign Ministry spokesperson Mao Ning said on Thursday that the Japanese citizen “was suspected of espionage and was subject to criminal compulsory measures taken by the relevant Chinese authorities in accordance with the law.” Watch: China to have operational nukes by 2030? | World News | WION × The Japanese authorities have not revealed more details about the detained person, including his name or the place where he is kept. The development comes amidst an ongoing crackdown on international consulting firms on national security grounds in China. Ramifications China’s actions might end up further jeopardising economic environment in the world’s second-largest economy, which could further fuel the West’s decoupling from the communist nation. In July, China imposed a fine of approximately $1.5 million on the Mintz Group, a US corporate due diligence firm, for purportedly engaging in unauthorised statistical activities within the country. As a consequence, Chinese officials shut down the group's Beijing office in March and apprehended five of its local staff members. Also read: Six Chinese warships were operating in West Asia amid Israel-Hamas tensions In May, the state security authorities revealed that they had conducted raids on multiple offices of Capvision, an advisory network. This announcement came a month after law enforcement authorities had questioned employees at the Shanghai office of the consultancy firm Bain. This situation has posed challenges for foreign businesses, some of which were already encountering difficulties in persuading their employees to relocate to China. Falling FDI As a result, foreign investors are dragging their feet on further investments in China. Foreign direct investment (FDI) in China fell 5.1 per cent from a year ago. Direct investment liabilities, a measure of FDI reflected in a country’s balance of payments, fell to just $4.9 billion in the April to June months (the lowest since 1998), according to data published in August by the State Administration of Foreign Exchange. (With inputs from agencies) WATCH WION LIVE HERE ×

China formally arrests Japanese man over ‘espionage’. What could be the consequences?

In a game of chance that mirrors China's economic landscape, lottery ticket sales hit an astounding jackpot in August, surging to their highest monthly level this year. With a whopping 53.6% year-on-year increase, these numbers tell a tale of economic uncertainty and a longing for financial fortune in a country grappling with subdued economic signals.

China's nationwide lottery ticket sales soared to $7.25 billion in August, according to data from the finance ministry. From January to August, the total lottery ticket sales reached ¥375.76 billion, marking a substantial 51.6% surge compared to the previous year. As the dice roll and numbers spin, these record-breaking sales coincide with months of mostly subdued economic data, which have raised concerns among the Chinese populace.

The youth unemployment rate, particularly for those aged 16 to 24, has drawn significant attention and apprehension. In June, China's youth unemployment rate reached an alarming 21.3%, a record high, as per official data. This unsettling figure has fueled young people's economic anxieties.

As housing costs rise and economic growth slows, jobless graduates are bypassing urban centers, which have historically been viewed as pathways to middle-class prosperity. Videos of unemployed university graduates seeking blessings at temples earlier this year went viral on Chinese social media.

In the game of economics, it seems that as economic woes deepen, lottery ticket sales rise, offering a tantalizing escape to riches overnight. As China navigates the high-stakes world of economics, the surge in lottery ticket sales reflects not just a quest for instant wealth but also the yearning for a financial lifeline in uncertain times. It's a game where dreams are spun from numbers, and hope springs eternal with every ticket bought.

The question&nbsp;is: are China's lottery tickets becoming the new symbol of economic aspiration?

In a game of chance that mirrors China's economic landscape, lottery ticket sales hit an astounding jackpot in August, surging to their highest monthly level this year.

In a game of chance that mirrors China's economic landscape, lottery ticket sales hit an astounding jackpot in August, surging to their highest monthly level this year. With a whopping 53.6% year-on-year increase, these numbers tell a tale of economic uncertainty and a longing for financial fortune in a country grappling with subdued economic signals. China's nationwide lottery ticket sales soared to $7.25 billion in August, according to data from the finance ministry. From January to August, the total lottery ticket sales reached ¥375.76 billion, marking a substantial 51.6% surge compared to the previous year. As the dice roll and numbers spin, these record-breaking sales coincide with months of mostly subdued economic data, which have raised concerns among the Chinese populace. The youth unemployment rate, particularly for those aged 16 to 24, has drawn significant attention and apprehension. In June, China's youth unemployment rate reached an alarming 21.3%, a record high, as per official data. This unsettling figure has fueled young people's economic anxieties. As housing costs rise and economic growth slows, jobless graduates are bypassing urban centers, which have historically been viewed as pathways to middle-class prosperity. Videos of unemployed university graduates seeking blessings at temples earlier this year went viral on Chinese social media. In the game of economics, it seems that as economic woes deepen, lottery ticket sales rise, offering a tantalizing escape to riches overnight. As China navigates the high-stakes world of economics, the surge in lottery ticket sales reflects not just a quest for instant wealth but also the yearning for a financial lifeline in uncertain times. It's a game where dreams are spun from numbers, and hope springs eternal with every ticket bought. The question is: are China's lottery tickets becoming the new symbol of economic aspiration?

China's economic rollercoaster: Youth bet on lottery dreams

China's economy is showing signs of weakness, and Xi Jinping is now backing the decades-old mantra of reform and opening up. The storm clouds persist, as data shows missed growth expectations, and consumers remain cautious. Analysts say China’s economic miracle was not that miraculous. The country’s high-octane ascent over the past 40 years is, in reality, a triumph of basic economic principles.

Storm clouds: Xi Jinping backs economic reforms after redirecting Chinese business inward | Details

A significant outflow of capital from Chinese stocks and bonds is reducing the market's influence in global portfolios and speeding up its decoupling from the rest of the globe, according to a report by the Times of India.

According to Bloomberg's statistics, calculated from the central bank’s data, foreign ownership of the country's equity and debt have decreased by around 1.37 trillion yuan ($188 billion), or 17 per cent, from a peak to the end of June this year.

The departure occurs at the same time as China's economic downturn brought on by years of Covid-19 restrictions, a housing market crisis, and ongoing hostilities with the West - worries that have contributed to making the "avoid China" theme one of the largest convictions among investors in Bank of America's most recent survey. Since the end of 2020, fewer foreign funds have been invested in the Hong Kong stock market, which accounts for a decrease of more than a third.

“Foreigners are just throwing in the towel,” the Times of India quoted Zhikai Chen, the head of Asia and global EM equities at BNP Paribas Asset Management. According to him, there are concerns about the property market and sluggish consumer spending. He said, “Disappointment on those fronts has led to a lot of foreign investors rethinking their exposure.”

Prior to this year, it was believed that China’s weakening would negatively affect the rest of the world, especially the emerging-markets group. The MSCI China Index is forecast to be down around 7 per cent in 2023, beginning a three-year losing streak that would be its longest in more than 20 years. As investors seek gains in other countries like India and other regions of Latin America, the larger MSCI Emerging Markets Index has increased by 3 per cent.

The disparity arises from China's efforts to become self-sufficient in all supply chains and the deterioration of relations with the US, which have rendered other markets less vulnerable to its ups and downs. The artificial intelligence boom, which has helped markets from the US to Taiwan while providing mainland shares less of a boost, is another factor in addition to the economic decoupling. From over 30 per cent at the end of 2021, China's weighting in the EM gauge has decreased to about 27 per cent presently.

The introduction of equity funds that exclude China already reached a new yearly high in 2023, indicating that a strategy to exclude China from emerging-market portfolios is quickly gaining acceptance.

The LGFV, housing stock overhang, demography, dependence ratio, regulatory instability, and geopolitical isolation are just a few of the dangers associated with China, Times of India cited Gaurav Pantankar, chief investment officer of MercedCERA, which manages around $1.1 billion in US assets.

According to data collated by Bloomberg, international investors have removed around $26 billion from Chinese government bonds in the debt market in 2023 while investing a total of $62 billion into notes from the rest of emerging Asia. According to a JPMorgan Chase &amp; Co. research, over half of the $250 billion to $300 billion inflow that came along with China's membership in government bond indexes since 2019 has been lost.

The yuan’s value against the dollar has reached a 16-year low due to selling pressure. The yuan is depreciating as a result of the central bank's loose monetary policy, which is in contrast to the tightening in most major economies and giving foreigners another reason to avoid local assets.

As a crisis in its real estate industry enters its fourth year, China looks to have entirely decoupled from the rest of Asia in terms of corporate debt performance. With domestic investors owning roughly 85–90 per cent of the market, it is now more regionally concentrated.

All of this occurs against the backdrop of China's faltering economy, which has led many to re-evaluate the market’s appeal as a location for investments. Citigroup Inc. and JPMorgan are two Wall Street banks that have doubts surrounding Beijing's 5 per cent growth ambition.

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A significant outflow of capital from Chinese stocks and bonds is reducing the market's influence in global portfolios and speeding up its decoupling from the rest of the globe, according to a report by the Times of India.

A significant outflow of capital from Chinese stocks and bonds is reducing the market's influence in global portfolios and speeding up its decoupling from the rest of the globe, according to a report by the Times of India. According to Bloomberg's statistics, calculated from the central bank’s data, foreign ownership of the country's equity and debt have decreased by around 1.37 trillion yuan ($188 billion), or 17 per cent, from a peak to the end of June this year. The departure occurs at the same time as China's economic downturn brought on by years of Covid-19 restrictions, a housing market crisis, and ongoing hostilities with the West - worries that have contributed to making the "avoid China" theme one of the largest convictions among investors in Bank of America's most recent survey. Since the end of 2020, fewer foreign funds have been invested in the Hong Kong stock market, which accounts for a decrease of more than a third. “Foreigners are just throwing in the towel,” the Times of India quoted Zhikai Chen, the head of Asia and global EM equities at BNP Paribas Asset Management. According to him, there are concerns about the property market and sluggish consumer spending. He said, “Disappointment on those fronts has led to a lot of foreign investors rethinking their exposure.” Prior to this year, it was believed that China’s weakening would negatively affect the rest of the world, especially the emerging-markets group. The MSCI China Index is forecast to be down around 7 per cent in 2023, beginning a three-year losing streak that would be its longest in more than 20 years. As investors seek gains in other countries like India and other regions of Latin America, the larger MSCI Emerging Markets Index has increased by 3 per cent. The disparity arises from China's efforts to become self-sufficient in all supply chains and the deterioration of relations with the US, which have rendered other markets less vulnerable to its ups and downs. The artificial intelligence boom, which has helped markets from the US to Taiwan while providing mainland shares less of a boost, is another factor in addition to the economic decoupling. From over 30 per cent at the end of 2021, China's weighting in the EM gauge has decreased to about 27 per cent presently. The introduction of equity funds that exclude China already reached a new yearly high in 2023, indicating that a strategy to exclude China from emerging-market portfolios is quickly gaining acceptance. The LGFV, housing stock overhang, demography, dependence ratio, regulatory instability, and geopolitical isolation are just a few of the dangers associated with China, Times of India cited Gaurav Pantankar, chief investment officer of MercedCERA, which manages around $1.1 billion in US assets. According to data collated by Bloomberg, international investors have removed around $26 billion from Chinese government bonds in the debt market in 2023 while investing a total of $62 billion into notes from the rest of emerging Asia. According to a JPMorgan Chase & Co. research, over half of the $250 billion to $300 billion inflow that came along with China's membership in government bond indexes since 2019 has been lost. The yuan’s value against the dollar has reached a 16-year low due to selling pressure. The yuan is depreciating as a result of the central bank's loose monetary policy, which is in contrast to the tightening in most major economies and giving foreigners another reason to avoid local assets. As a crisis in its real estate industry enters its fourth year, China looks to have entirely decoupled from the rest of Asia in terms of corporate debt performance. With domestic investors owning roughly 85–90 per cent of the market, it is now more regionally concentrated. All of this occurs against the backdrop of China's faltering economy, which has led many to re-evaluate the market’s appeal as a location for investments. Citigroup Inc. and JPMorgan are two Wall Street banks that have doubts surrounding Beijing's 5 per cent growth ambition. WATCH WION LIVE HERE

China’s decoupling speeds up as it loses about $200 billion from its markets

As the nation’s confidence declines, China is no longer expected to overtake the US as the largest economy anytime soon, and it may never overtake the US to claim the top spot, according to a report by Bloomberg.

The report said that China’s gross domestic output would not surpass that of the US until the middle of the 2040s, and even then, it won’t be by much before “falling behind” at that point. Prior to the pandemic, they predicted that China would seize and maintain the top spot by the beginning of the following decade.

In a research note brought out on Tuesday, Bloomberg Economists said, “China is down-shifting onto a slower growth path sooner than we expected. The post-Covid rebound has run out of steam, reflecting a deepening&nbsp;property slump and fading confidence in Beijing’s management of the economy. Weak confidence risks becoming entrenched — resulting in an enduring drag on growth potential.”

The second-largest economy in the world, China, is now expected to develop at a slower rate, to 3.5 per cent in 2030 and 1 per cent or less by 2050, according to experts. In comparison to earlier estimates of 4.3 per cent and 1.6 per cent, respectively, this is less.

China’s economy grew by 3 per cent last year, which was one of the country’s slowest rates of growth in recent memory due to economic restrictions and a real estate crisis. Its final reopening gave rise to optimism that the economy will improve this year. However, as exports plummet and the real estate downturn worsens, the recovery has lost momentum. Additionally, economists surveyed by Bloomberg have lowered their growth projections for 2024 even further, to below 5 per cent.

The updated prognosis comes as the international community re-evaluates how to deal with a China that may be nearing a power peak.

The US and the Group of Seven countries are increasingly examining signs of deep-seated structural issues in China, spotting possibilities that could ultimately boost the West’s position against a collapsing geopolitical rival, while also taking the slowdown’s wider implications into account. Commodities and stocks are already in disorder due to this year’s setbacks.

Additionally, China is coping with more serious, long-term issues. The country had its first population decline since the 1960s in 2017, which has stoked fears about declining productivity. Confidence has also been impacted by regulatory crackdowns and geopolitical conflicts with the US and other Western governments.

The US, however, seems to be doing better than many economists had anticipated just a few months ago. The ability of the economy to avoid a recession for the time being has been boosted by a strong labour market, robust consumer spending, and moderate inflation.

According to Bloomberg Economics, prospective US growth will be 1.7 per cent in 2022–2023, with long-term projections indicating a gradual decline to 1.5 per cent by 2050.

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As the nation’s confidence declines, China is no longer expected to overtake the US as the largest economy anytime soon, and it may never overtake the US to claim the top spot, according to a report by Bloomberg.

As the nation’s confidence declines, China is no longer expected to overtake the US as the largest economy anytime soon, and it may never overtake the US to claim the top spot, according to a report by Bloomberg. The report said that China’s gross domestic output would not surpass that of the US until the middle of the 2040s, and even then, it won’t be by much before “falling behind” at that point. Prior to the pandemic, they predicted that China would seize and maintain the top spot by the beginning of the following decade. In a research note brought out on Tuesday, Bloomberg Economists said, “China is down-shifting onto a slower growth path sooner than we expected. The post-Covid rebound has run out of steam, reflecting a deepening property slump and fading confidence in Beijing’s management of the economy. Weak confidence risks becoming entrenched — resulting in an enduring drag on growth potential.” The second-largest economy in the world, China, is now expected to develop at a slower rate, to 3.5 per cent in 2030 and 1 per cent or less by 2050, according to experts. In comparison to earlier estimates of 4.3 per cent and 1.6 per cent, respectively, this is less. China’s economy grew by 3 per cent last year, which was one of the country’s slowest rates of growth in recent memory due to economic restrictions and a real estate crisis. Its final reopening gave rise to optimism that the economy will improve this year. However, as exports plummet and the real estate downturn worsens, the recovery has lost momentum. Additionally, economists surveyed by Bloomberg have lowered their growth projections for 2024 even further, to below 5 per cent. The updated prognosis comes as the international community re-evaluates how to deal with a China that may be nearing a power peak. The US and the Group of Seven countries are increasingly examining signs of deep-seated structural issues in China, spotting possibilities that could ultimately boost the West’s position against a collapsing geopolitical rival, while also taking the slowdown’s wider implications into account. Commodities and stocks are already in disorder due to this year’s setbacks. Additionally, China is coping with more serious, long-term issues. The country had its first population decline since the 1960s in 2017, which has stoked fears about declining productivity. Confidence has also been impacted by regulatory crackdowns and geopolitical conflicts with the US and other Western governments. The US, however, seems to be doing better than many economists had anticipated just a few months ago. The ability of the economy to avoid a recession for the time being has been boosted by a strong labour market, robust consumer spending, and moderate inflation. According to Bloomberg Economics, prospective US growth will be 1.7 per cent in 2022–2023, with long-term projections indicating a gradual decline to 1.5 per cent by 2050. WATCH WION LIVE HERE

Forecast: China’s slowdown means it may not surpass US economy

China's economy was expected to generate a third of global economic growth this year, but the country's precipitous downturn in recent months is causing concern throughout the world.

Policymakers are bracing their economies for a hit as China's imports of everything, from building supplies to electronics, fall. According to Caterpillar Inc., Chinese demand for construction machinery is worse than previously assumed.

A recent Bloomberg report highlighted&nbsp;that global investors have already removed more than $10 billion from China's stock markets, with blue chips accounting for the majority of the selling. Goldman Sachs Group Inc. and Morgan Stanley have reduced their targets for Chinese stocks, with the former also warning of regional spillover concerns.

Asian economies, along with African countries, have suffered the most damage to their commerce thus far. In July, Japan recorded its first dip in exports in more than two years as China reduced imports of vehicles and electronics. South Korean and Thai central bankers downgraded their growth projections last week, citing China's slow recovery.

China's downturn: global market impact

However, it is&nbsp;not all bleak, as China’s downturn will lower global energy costs, and the country's deflation will imply that the prices of commodities sent throughout the world are reducing. This is good news for nations like the United States and the United Kingdom, which are currently dealing with high inflation.

Some rising nations, such as India, perceive openings and hope to attract foreign investment that may be leaving China's borders.

However, as the world's second-largest economy, a prolonged downturn in China will&nbsp;affect the rest of the world rather than benefit it. According to International Monetary Fund research, every percentage point increase in China's growth rate boosts global expansion by around 0.3 percentage points.

China's deflation "isn't such a bad thing" for the global economy. "However, if the rest of the world, including the United States and Europe, goes into recession and China remains weak, that will be a problem—not just for China but for the entire global economy,"&nbsp;Peter Berezin, chief global strategist at BCA Research Inc., said in an interview on Bloomberg TV.

Decline in trade activity

Many nations, particularly those in Asia, consider China to be their most important export market for everything from electronic components and food to metals and energy.

The value of Chinese imports has declined for nine of the last ten months as demand falls from epidemic highs. Shipments from Africa, Asia, and North America were all worth less in July than a year earlier.

Africa and Asia have been impacted the worst, with imports falling by more than 14 per cent&nbsp;in the first seven months of this year. Part of this is due to a reduction in demand for electronics parts from South Korea and Taiwan, while declining commodity prices, such as those for fossil fuels, are also having an impact on the value of items exported to China.

At present, the real volume of goods shipped to China, such as iron ore, has remained stable. However, if the slowdown persists, supplies might be disrupted, affecting miners in Australia, South America, and other parts of the world.

Impact of currency fluctuation

China's economic difficulties have driven the yuan down more than 5 percent versus the dollar this year, with the yuan on the verge of breaking through the 7.3 barrier this month. The central bank has stepped up its defense of the yuan through a variety of means, including daily currency fixes.

According to Bloomberg statistics, the offshore yuan's devaluation is having a stronger influence on its counterparts in Asia, Latin America, and the Central and Eastern Europe bloc, with the Chinese currency's correlation to certain others growing.

China's interest rate reduction this year has made its bonds less appealing to international investors, who have decreased their exposure to the market and are seeking alternatives elsewhere in the region.

(Inputs from Bloomberg)

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China's economy was expected to generate a third of global economic growth this year, but the country's precipitous downturn in recent months is causing concern throughout the world.

China's economy was expected to generate a third of global economic growth this year, but the country's precipitous downturn in recent months is causing concern throughout the world. Policymakers are bracing their economies for a hit as China's imports of everything, from building supplies to electronics, fall. According to Caterpillar Inc., Chinese demand for construction machinery is worse than previously assumed. A recent Bloomberg report highlighted that global investors have already removed more than $10 billion from China's stock markets, with blue chips accounting for the majority of the selling. Goldman Sachs Group Inc. and Morgan Stanley have reduced their targets for Chinese stocks, with the former also warning of regional spillover concerns. Asian economies, along with African countries, have suffered the most damage to their commerce thus far. In July, Japan recorded its first dip in exports in more than two years as China reduced imports of vehicles and electronics. South Korean and Thai central bankers downgraded their growth projections last week, citing China's slow recovery. China's downturn: global market impact However, it is not all bleak, as China’s downturn will lower global energy costs, and the country's deflation will imply that the prices of commodities sent throughout the world are reducing. This is good news for nations like the United States and the United Kingdom, which are currently dealing with high inflation. Some rising nations, such as India, perceive openings and hope to attract foreign investment that may be leaving China's borders. However, as the world's second-largest economy, a prolonged downturn in China will affect the rest of the world rather than benefit it. According to International Monetary Fund research, every percentage point increase in China's growth rate boosts global expansion by around 0.3 percentage points. China's deflation "isn't such a bad thing" for the global economy. "However, if the rest of the world, including the United States and Europe, goes into recession and China remains weak, that will be a problem—not just for China but for the entire global economy," Peter Berezin, chief global strategist at BCA Research Inc., said in an interview on Bloomberg TV. Decline in trade activity Many nations, particularly those in Asia, consider China to be their most important export market for everything from electronic components and food to metals and energy. The value of Chinese imports has declined for nine of the last ten months as demand falls from epidemic highs. Shipments from Africa, Asia, and North America were all worth less in July than a year earlier. Africa and Asia have been impacted the worst, with imports falling by more than 14 per cent in the first seven months of this year. Part of this is due to a reduction in demand for electronics parts from South Korea and Taiwan, while declining commodity prices, such as those for fossil fuels, are also having an impact on the value of items exported to China. At present, the real volume of goods shipped to China, such as iron ore, has remained stable. However, if the slowdown persists, supplies might be disrupted, affecting miners in Australia, South America, and other parts of the world. Impact of currency fluctuation China's economic difficulties have driven the yuan down more than 5 percent versus the dollar this year, with the yuan on the verge of breaking through the 7.3 barrier this month. The central bank has stepped up its defense of the yuan through a variety of means, including daily currency fixes. According to Bloomberg statistics, the offshore yuan's devaluation is having a stronger influence on its counterparts in Asia, Latin America, and the Central and Eastern Europe bloc, with the Chinese currency's correlation to certain others growing. China's interest rate reduction this year has made its bonds less appealing to international investors, who have decreased their exposure to the market and are seeking alternatives elsewhere in the region. (Inputs from Bloomberg) WATCH WION LIVE HERE

Worries mount globally as China's economy slumps

China's more assertive stance in supporting its markets has provided a sense of relief for assets in developing countries, which have been under pressure due to concerns about the global economy's second-largest player.

After enduring a nine-day streak of losses that began in April of the previous year, emerging-market equities experienced a rebound. Chinese stocks surged during late Asian trading, shortly after Beijing strengthened its defense of the currency. This development bolstered sentiment towards other risky assets.

Currencies such as the South African rand and South Korean won, which had been adversely affected by recent declines in the yuan, led the rally on Tuesday.

However, it's unclear how long the reprieve will last. Strategists suggest that China's measures to stabilise the yuan are insufficient to arrest its devaluation, as the lack of any meaningful initiatives to promote consumer spending and a raging property sector crisis further erode investor confidence.

Concerns regarding China's economic slowdown and expectations of prolonged higher interest rates by the US Federal Reserve have contributed to the most significant August sell-off in years for emerging markets.

Bloomberg quoted Piotr Matys, a currency analyst at InTouch Capital Markets in London, as saying: "The rebound in Chinese stocks provides emerging markets with some respite. But concrete measures from Beijing are needed to address structural issues in the Chinese economy, which are a major source of concern for investors to anticipate sustained improvement in risk appetite."

China has implemented measures to curtail offshore funding, resulting in increased costs for speculators attempting to bet against the yuan. Additionally, the country set a new record for the currency's reference rate, surpassing initial predictions.

On Tuesday, the People's Bank of China fixed the daily exchange rate at 7.1992 per dollar, notably lower than the Bloomberg survey average of 7.3103. This marked the most significant deviation since the inception of polling in 2018.

Furthermore, while several traders attribute the sudden surge in Chinese equities to technical factors and a lack of new catalysts, discussions about state-backed fund purchases have also been prevalent.

Moreover, the BRICS meeting&nbsp;in Johannesburg is&nbsp;focusing on reducing dependence on the US dollar. Apart from developments related to the summit, investors are eager to gather insights into the global interest rate trajectory from central bankers at their annual gathering in Jackson Hole, Wyoming, later this week.&nbsp;

(Inputs from Bloomberg)

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China's more assertive stance in supporting its markets has provided a sense of relief for assets in developing countries, which have been under pressure due to concerns about the global economy's second-largest player.

China's more assertive stance in supporting its markets has provided a sense of relief for assets in developing countries, which have been under pressure due to concerns about the global economy's second-largest player. After enduring a nine-day streak of losses that began in April of the previous year, emerging-market equities experienced a rebound. Chinese stocks surged during late Asian trading, shortly after Beijing strengthened its defense of the currency. This development bolstered sentiment towards other risky assets. Currencies such as the South African rand and South Korean won, which had been adversely affected by recent declines in the yuan, led the rally on Tuesday. However, it's unclear how long the reprieve will last. Strategists suggest that China's measures to stabilise the yuan are insufficient to arrest its devaluation, as the lack of any meaningful initiatives to promote consumer spending and a raging property sector crisis further erode investor confidence. Concerns regarding China's economic slowdown and expectations of prolonged higher interest rates by the US Federal Reserve have contributed to the most significant August sell-off in years for emerging markets. Bloomberg quoted Piotr Matys, a currency analyst at InTouch Capital Markets in London, as saying: "The rebound in Chinese stocks provides emerging markets with some respite. But concrete measures from Beijing are needed to address structural issues in the Chinese economy, which are a major source of concern for investors to anticipate sustained improvement in risk appetite." China has implemented measures to curtail offshore funding, resulting in increased costs for speculators attempting to bet against the yuan. Additionally, the country set a new record for the currency's reference rate, surpassing initial predictions. On Tuesday, the People's Bank of China fixed the daily exchange rate at 7.1992 per dollar, notably lower than the Bloomberg survey average of 7.3103. This marked the most significant deviation since the inception of polling in 2018. Furthermore, while several traders attribute the sudden surge in Chinese equities to technical factors and a lack of new catalysts, discussions about state-backed fund purchases have also been prevalent. Moreover, the BRICS meeting in Johannesburg is focusing on reducing dependence on the US dollar. Apart from developments related to the summit, investors are eager to gather insights into the global interest rate trajectory from central bankers at their annual gathering in Jackson Hole, Wyoming, later this week. (Inputs from Bloomberg) WATCH WION LIVE HERE

China's stronger stance on yuan brings relief to emerging markets

China State Council announced new steps to enhance the country's economic climate and also encourage foreign investment. These measures include changes to the visa and tax policies as well.

China battles growing economic woes, Xi calls for patience

China economy: Overall urban employment rises, economy in China signals sharper downturn

China's economic woes: China aims to attract more foreign investment in key industries

China's economy slumps into deflation. Consumer prices fell year on year. For the first time in more than two years.

China's economy slides into deflation. What are its impacts on the global economy?

Asia's factory activity experienced a contraction in July, signaling a slowdown in global growth and reflecting the impact of China's weakening economy on the region's fragile recovery. Private surveys cited by Reuters revealed that several Asian countries, including Japan, South Korea, Taiwan, and Vietnam, faced challenges due to sluggish Chinese demand.

The Caixin/S&amp;P Global Manufacturing Purchasing Managers' Index (PMI) for China fell to 49.2 in July from 50.5 in June, marking the first decline in activity since April and falling short of analysts' expectations of 50.3. The 50-point index separates growth from contraction, and this decline highlights the mounting pressure on policymakers to manage inflation with tight monetary policies while navigating potential headwinds from a recession in the world's second-largest economy.

Japan, one of the leading economies in the region, experienced a contraction in its manufacturing activity during July, as shown by the final au Jibun Bank PMI, which dropped to 49.6 from 49.8 in June. The weakened activity was attributed to soft orders stemming from weakening global economic conditions and subdued demand from both domestic and overseas markets.

However, there were some signs of optimism in Japan's economic outlook. The country's factory output grew in June for the first time in two months, primarily due to solid auto production. Furthermore, the S&amp;P survey showed that cost pressures for Japanese companies eased, thanks to declining fuel and commodity prices. This provided some relief for manufacturers grappling with slowing demand from foreign markets.

Looking ahead, manufacturers' output expectations remained positive, with hopes for sustained demand improvements and the pandemic's fading economic impact. The subindex reflecting output expectations remained consistent with June's reading, which was the strongest since October 2021.

The challenges faced by Japan and other Asian economies come at a time when the region had been considered one of the few bright spots in the global economy. However, China's economic slowdown has clouded the overall outlook. In revised forecasts issued in July, the International Monetary Fund projected that emerging Asia's economic growth would accelerate to 5.3 per cent in 2023 from 4.5 per cent in 2022, while China's economy is expected to expand by 5.2 per cent this year after a 3.0 per cent increase in 2022.

The situation underscores the delicate balancing act for policymakers, who must address inflationary pressures with tight monetary policies while also supporting economic recovery and growth in the region. Falling new orders, bleak employment prospects, and high inventory levels point to subdued factory activity in the coming months, raising concerns about the durability of the economic recovery in the region.

(With Inputs from Reuters)

Asia's factory activity experienced a contraction in July, signaling a slowdown in global growth and reflecting the impact of China's weakening economy on the region's fragile recovery.

Asia's factory activity experienced a contraction in July, signaling a slowdown in global growth and reflecting the impact of China's weakening economy on the region's fragile recovery. Private surveys cited by Reuters revealed that several Asian countries, including Japan, South Korea, Taiwan, and Vietnam, faced challenges due to sluggish Chinese demand. The Caixin/S&P Global Manufacturing Purchasing Managers' Index (PMI) for China fell to 49.2 in July from 50.5 in June, marking the first decline in activity since April and falling short of analysts' expectations of 50.3. The 50-point index separates growth from contraction, and this decline highlights the mounting pressure on policymakers to manage inflation with tight monetary policies while navigating potential headwinds from a recession in the world's second-largest economy. Japan, one of the leading economies in the region, experienced a contraction in its manufacturing activity during July, as shown by the final au Jibun Bank PMI, which dropped to 49.6 from 49.8 in June. The weakened activity was attributed to soft orders stemming from weakening global economic conditions and subdued demand from both domestic and overseas markets. However, there were some signs of optimism in Japan's economic outlook. The country's factory output grew in June for the first time in two months, primarily due to solid auto production. Furthermore, the S&P survey showed that cost pressures for Japanese companies eased, thanks to declining fuel and commodity prices. This provided some relief for manufacturers grappling with slowing demand from foreign markets. Looking ahead, manufacturers' output expectations remained positive, with hopes for sustained demand improvements and the pandemic's fading economic impact. The subindex reflecting output expectations remained consistent with June's reading, which was the strongest since October 2021. The challenges faced by Japan and other Asian economies come at a time when the region had been considered one of the few bright spots in the global economy. However, China's economic slowdown has clouded the overall outlook. In revised forecasts issued in July, the International Monetary Fund projected that emerging Asia's economic growth would accelerate to 5.3 per cent in 2023 from 4.5 per cent in 2022, while China's economy is expected to expand by 5.2 per cent this year after a 3.0 per cent increase in 2022. The situation underscores the delicate balancing act for policymakers, who must address inflationary pressures with tight monetary policies while also supporting economic recovery and growth in the region. Falling new orders, bleak employment prospects, and high inventory levels point to subdued factory activity in the coming months, raising concerns about the durability of the economic recovery in the region. (With Inputs from Reuters)

Manufacturing blues in Asia: Global slowdown puts pressure on recovery

We tell you all the factors behind the Chinese economy losing its fire. We also look at whether there is a new contender that could benefit from China's loss?

Why is China's economy losing its fire?

China's economy is headed for trouble, the Asian superpower leaders have expressed concern over a slew of fiscal challenges at its annual meeting held on Monday. The leaders at the Communist Party's political bureau discussed a host of issues that have triggered an economic slump in the country.

China's economy post-Covid: Will China meet it's annual growth target?

In China, a new trend called "full-time children" is making the headlines. What it means is that full-grown individuals get paid a salary by their parents to be their children "full-time". They hang out with their parents, take them out shopping, help around the house etc.&nbsp;

While getting paid to spend time with your loved ones does sound like the perfect&nbsp;job, the reason for this so-called "job" cropping up is anything but heart-warming. Here's all you need to know.

<h2>The rise of #FullTimeChildren</h2>

Almost three years of pandemic restrictions and rapidly increasing unemployment are the catalysts behind "full-time children".

In China, youth unemployment has become a serious challenge for the nation's economy,&nbsp;battered by its stringent "zero-Covid" restrictions.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/june-saw-china-youth-employment-at-record-high-of-213-economy-grew-by-63-616331">June saw China youth employment at record high of 21.3%; economy grew by 6.3%</a>

As per a National Bureau of Statistics report released on Monday, in June, the nation's youth unemployment rate —&nbsp;people between ages 16 and 24 — reached a record high of 21.3 per cent.&nbsp;

NBC News reports that some full-time children "fall into" the job inadvertently as they look for jobs or pursue higher degrees.&nbsp;

<h2>How society views the "full-time children"</h2>

While hashtags #FullTimeDaughter and #FullTimeSon have been trending in China, the Chinese society most often than not accuses these individuals of mooching off of their parents and "chewing the old".&nbsp;

This Chinese slang term is a derogatory phrase for young people who are fully dependent on their parents to make a living.

Some parents see the trend of "full-time children" as a "blessing," while others view it as a temporary "phase" and believe it cannot be a permanent arrangement.

<h2>A worrying trend</h2>

Talking to NBC, Mao Xuxin, principal economist at the National Institute of Economic and Social Research in Britain said that the trend was "worrying".

He said that in recent years, young people in China had started looking for less challenging, short-term jobs. This he said was followed by what he called the "lying flat" movement, where people would do the bare minimum, or just enough to get by. Now, Mao said it has escalated to people taking the next step and asking for their parent's help.

Also read |&nbsp;<a href="https://www.wionews.com/trending/age-is-just-a-number-china-hotels-refuse-to-serve-customers-aged-35-and-above-617186">Explained | Age is just a number? China youth hostels refuse to serve customers aged 35 and above</a>

As per Lu Xi, an assistant professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, the wave of unemployment in China "may have just begun."

"In the absence of additional job creation, the phenomenon of 'full-time children' will be exacerbated, creating a vicious cycle," said Lu.&nbsp;

"The average disposable income of households will be reduced, resulting in a decline in overall social consumption, which in turn limits the social capacity to create new jobs, creating more unemployment, and thus, more full-time children," he predicts.

(With inputs from agencies)

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In China, a new trend called "full-time children" is making the headlines. What it means is that full-grown individuals get paid a salary by their parents to be their children "full-time".

In China, a new trend called "full-time children" is making the headlines. What it means is that full-grown individuals get paid a salary by their parents to be their children "full-time". They hang out with their parents, take them out shopping, help around the house etc. While getting paid to spend time with your loved ones does sound like the perfect job, the reason for this so-called "job" cropping up is anything but heart-warming. Here's all you need to know. The rise of #FullTimeChildren Almost three years of pandemic restrictions and rapidly increasing unemployment are the catalysts behind "full-time children". In China, youth unemployment has become a serious challenge for the nation's economy, battered by its stringent "zero-Covid" restrictions. Also read | June saw China youth employment at record high of 21.3%; economy grew by 6.3% As per a National Bureau of Statistics report released on Monday, in June, the nation's youth unemployment rate — people between ages 16 and 24 — reached a record high of 21.3 per cent. NBC News reports that some full-time children "fall into" the job inadvertently as they look for jobs or pursue higher degrees. How society views the "full-time children" While hashtags #FullTimeDaughter and #FullTimeSon have been trending in China, the Chinese society most often than not accuses these individuals of mooching off of their parents and "chewing the old". This Chinese slang term is a derogatory phrase for young people who are fully dependent on their parents to make a living. Some parents see the trend of "full-time children" as a "blessing," while others view it as a temporary "phase" and believe it cannot be a permanent arrangement. A worrying trend Talking to NBC, Mao Xuxin, principal economist at the National Institute of Economic and Social Research in Britain said that the trend was "worrying". He said that in recent years, young people in China had started looking for less challenging, short-term jobs. This he said was followed by what he called the "lying flat" movement, where people would do the bare minimum, or just enough to get by. Now, Mao said it has escalated to people taking the next step and asking for their parent's help. Also read | Explained | Age is just a number? China youth hostels refuse to serve customers aged 35 and above As per Lu Xi, an assistant professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, the wave of unemployment in China "may have just begun." "In the absence of additional job creation, the phenomenon of 'full-time children' will be exacerbated, creating a vicious cycle," said Lu. "The average disposable income of households will be reduced, resulting in a decline in overall social consumption, which in turn limits the social capacity to create new jobs, creating more unemployment, and thus, more full-time children," he predicts. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

China's youth unemployment crisis spurs trend called 'full-time children'. Here's all you need to know

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