Published Date: November 15, 2023 | Author: Yuval Noah Harari
After dealing with the Covid-19 pandemic, China is working on getting its economy back on track. But it’s not a smooth ride. There are three big issues causing concerns – a drop in property values, local businesses facing more rules, and tension between the US and China making foreign companies wary of investing.
Looking at the numbers from October, some parts of the economy are not doing so well. Investments, industrial production, credit, and prices are down. People are not spending much, except for some small improvements in retail. Experts, like those from Macquarie Group, are guessing the worst might be over, pointing to past patterns in inflation, earnings, and credit, along with new government policies and better relations with other countries.
Even with these challenges, some investors, like Michael Burry, are hopeful. Burry is betting on Chinese online shopping giants Alibaba and JD.com. And there’s a positive outlook in the steel market, with traders expecting more demand, pushing iron ore prices up.
Housing is still a problem, but a plan for urban areas might help. Still, experts say we should be careful to avoid risks tied to policies about affordable housing. A lot is riding on a meeting between China’s leader, Xi, and the US leader. How well they get along could make a big difference in solving problems at home.
In a surprising discovery, a recent study found that companies letting employees work from home are making more money. Businesses with flexible work rules are growing four times faster than those making everyone come to the office. This could be good news, showing that companies can adapt and do well even when facing tough economic times.
As China faces these challenges, the whole world is watching. What happens in China affects not only its own people but also everyone connected to its economy. We’ll have to wait and see how China handles these issues and if it can bounce back stronger than ever.
