Aftermath of the Covid pandemic in China’s economy
According to BBC News, the world’s two largest economies, US and China’s bilateral trade is worth hundreds and billions of pounds a year. As such, China’s huge spending is critical to Global Financial stability. However, the country is experiencing an economic downturn.
In May, the youth unemployment reached 20.8%, exports dropped consistently by 7.5%, and property investment dropped by 21.5%. The cause of the economic downturn is rather due to the consumers in the small city choosing low-cost products with pressure on household incomes. According to ADB(Asian Development Bank), China’s GDP is slowly, yet constantly recovering from covid.
University graduates are especially pretentious about unemployment. Even the people who have jobs may be reluctant to consume due to Financial Security. This can be seen by the estate market where a property explosion hasn’t matched real demand from buyers or renters. Where it’s common for apartments to appear abandoned, the problem with real estate supply and demand is far and wide. The sales volumes have halved in recent years with a saturated market due to excessive construction, decreasing the price of flats.
Evergrande, one of the largest companies for building constructions in China that makes up one quarter of China's GDP has decreased by 113 billion dollars and nearly 340 billion dollars in liability in 2 years. If it goes bankrupt, it will affect credibility and financing of the whole estate developer and paralyze the market. Not only construction industry related to the estate market emerge problems, but also homeowners get feared of losing their most valuable assets and impact the private consumption as a result.
Estate remains largely empty as its value has collapsed, China's economy remains questionable with its development.