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China's Economic Problems Rising

An evening sunlight casts on a woman as people walk near the Central Business District during the rush hour in Beijing on Monday, Aug. 14, 2023. (AP Photo/Andy Wong)
An evening sunlight casts on a woman as people walk near the Central Business District during the rush hour in Beijing on Monday, Aug. 14, 2023. (AP Photo/Andy Wong)
China's Economic Problems Rising
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China’s exports fell 14.5 percent in July compared with a year earlier. The report builds pressure on the ruling Chinese Communist Party to support measures to improve China’s economy.

In related economic news, a large Chinese financial services company has missed payments on some of its investment products. And a drop in home prices is adding to economic concerns in China.

Zhongrong International Trust Co. holds a lot of property investments. A top official told investors that the company failed to make payments on a number of investment products since late last month.

China’s economy

On Tuesday, customs information was released showing that imports have fallen 12.4 percent. That hurts global exporters who see China as a big market for industrial materials, food and goods.

Exports fell to $281.8 billion as the decrease sped up from June’s 12.4 percent decrease. The value of imports has fallen to $201.2 billion.

In addition, the country’s global trade surplus decreased by 20.4 percent to $80.6 billion from a record high a year ago.

Chinese leaders are trying to increase business and buyer activity. Economic growth, after COVID-19 restrictions were lifted in December, has decreased earlier than expected.

Economic growth fell to 0.8 percent in the three months ending in June. China reported 2.2 percent of growth from January to March of this year. Those numbers suggest a 3.2 percent yearly growth rate, which would be among China’s weakest in 30 years.

Demand for Chinese exports decreased after the American government and governments in Europe and Asia started raising interest rates in 2022. Their goal was to reduce inflation, which had reached levels not seen in many years.

Capital Economics is a research company based in London. It said the decrease in exports was the largest since the start of the COVID-19 pandemic in 2020. It said the decrease was mostly caused by lower prices, while the amount of goods was above levels before 2020.

“We expect exports to decline further over the coming months before bottoming out toward the end of the year,” said Capital Economics in a report. It added that it expects the near-term to remain difficult for the buying of goods in developed economies.

Falling home prices

Adding to economic difficulties, China’s new home prices fell in July for the first time this year.

Prices fell 0.2 percent month-on-month across the country and 0.1 percent year-on-year, Reuters found based on National Bureau of Statistics (NBS) data.

But the picture is far worse outside of the country’s largest cities like Shanghai and Beijing. Reuters found that average new home prices in 35 small cities fell for the 17th straight month in June when compared to the year before, based on NBS information.

I’m Gregory Stachel.

Gregory Stachel adapted this report for VOA Learning English from Associated Press and Reuters materials.


Words in This Story

global adj. involving the entire world

decline v. to become lower in amount or less in number


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