Thread by @finshots

The Chinese economy recorded its slowest growth in a year.

What’s happening, you ask? (1/9)

~The only major economy to end 2020 sans recession, #China clocked a GDP growth rate of 18.3% in Q1.

~But this quarter, it was only 4.9%. The last time this happened, China was dealing with a pandemic. (2/9)

This time it's courtesy of 3 major pain points- the energy, shipping, and real estate crises.

1.) The Energy Crunch. As economies opened up, the demand for goods increased. Production rose, and so did the demand for coal...(3/9)

~But China couldn’t meet it due to limits in mining and carbon emissions, and the ongoing trade dispute with Australia.

~Soon, coal prices soared & prompted usage curbs. Some factories were even asked to cease production. Naturally, output declined and weighed down on GDP (4/9)

2.) Further, the shipping crisis caused by on-and-off lockdowns continued to plague exporters with container shortages & sky-high freight costs, making it incredibly difficult to meet overseas orders. (5/9)

3.) To top it all, the infamous Evergrande crisis flung the property sector in a downward spiral, with $305B in the red.

~Property sales, construction, and investment aren’t great and another major developer defaulted on a $205.7M bond payment. (6/9)

~The successive wave of defaults doesn’t bode well.
Many financial firms lowered their forecasts in light of the crises. Experts say China’s GDP will face further pressure in Q4.(7/9)

The #government is likely to take steps to amp up growth in the coming months to meet GDP targets. Will they be fruitful? We’ll know in due time. (8/9)

Sources:
China GDP disappoints, third-quarter growth slows to 4.9%: CNBC

China's economy is getting walloped by crises in energy, shipping, and real estate: CNN

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Visit @joinditto (by Finshots) for simplified health and term insurance advice. (9/9)