Finance & economics | Power trip

China’s economy is in desperate need of rescue

Yet available options appear politically unpalatable

Chinese lion dancers tripping over their shoelaces
Image: Agnès Ricart
|Hong Kong

The headlines keep getting worse for China. Consumer prices are falling. America is shunning exports from the country and restricting investment in it. China’s trade with its best customer and biggest rival shrank by a fifth in July compared with a year earlier. The country’s property sector, which has driven more than 20% of its gdp in recent years, is teetering. Developers, which carry debts worth about 16% of gdp, are struggling to meet their obligations. Two of them, Country Garden and Sino-Ocean, have missed bond payments. Investment products sold by Zhongrong Trust, which are probably exposed to property, have failed to pay out.

This article appeared in the Finance & economics section of the print edition under the headline “Power trip”

From the August 26th 2023 edition

Discover stories from this section and more in the list of contents

Explore the edition

More from Finance & economics

A citizen watches the closing price of the Shanghai Stock Exchange in Hai 'an, East China's Jiangsu province.

China’s markets take a fresh beating

Authorities have responded by bossing around investors

Donald Trump speaks during a campaign event at Austin-Bergstrom International Airport, USA. Trump stood in front of a poster reading 'Deport Illegals Now'.

Can America’s economy cope with mass deportations?

Production slowdowns, more imports and pricier housing could follow


A bubble wand blows bubbles containing icons of a house, car, and ".com."

Would an artificial-intelligence bubble be so bad?

A new book by Byrne Hobart and Tobias Huber argues there are advantages to financial mania


Will Elon Musk dominate President Trump’s economic policy?

He will face challenges from both America firsters and conservative mainstreamers

What investors expect from President Trump

Shareholders are over the moon; bondholders are readying the whip hand

China’s firms are taking flight, worrying its rulers

Policymakers at home and abroad are anxious about offshoring