US Moves to Counter China Economic Slowdown Raise Concerns for Domestic Commerce

As Beijing struggles with a severe recession, the Biden administration’s tariffs and additional technology restrictions against China economic slowdown could have an impact on the US economy.

Consumer prices in China actually decreased by 0.3% in July after scarcely increasing for previous months. This phenomenon, known as deflation, demonstrated how the Chinese economy is faltering as demand declines. 

After years of rapid expansion, the gross domestic product is also likely to decrease, which has significant economic ramifications outside of only Asia. Professor of international finance at George Washington University Scheherazade Rehman predicts that the US economy would be directly impacted by China’s slowdown.

Additionally, the United States has slapped tariffs on China, severely depressing its economy. Former President Donald Trump controversially imposed the tariffs, which current President Joe Biden has maintained. 

According to Rehman, the US would feel the effects of a two-pronged attack from the slowing Chinese economy and tariffs. This is not good for the US, and China’s slowing down and more actions, as well as the continuation of the Trump administration’s tariffs, do not help. 

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Real Estate Crisis: China’s Government Struggle

Chinese industry orders are down, domestic travel expenditure in China is down, and there is a general drag on consumption across China, all of which have recently contributed to Beijing’s economic troubles.

China’s youth unemployment rate is rising, which is a sign of the country’s severe financial difficulties. Chinese young adults aged 16 to 24 who live in metropolitan areas presently have an unemployment rate of more than 21%. 

That is far higher than it was a few years ago. A real estate crisis is also present in China. By cracking down on the highly indebted real estate sector back in 2020, the government shot itself in the foot. 

It did this to lessen the danger to its banking system, but in the process it drove down home prices and caused a number of enterprises to go bankrupt.

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Source: www.washingtonexaminer.com