Of course, the world economy is not doing well. But there is one country that can be considered sicker than others, in terms of development model crisis: the China. For heaven's sake, in geopolitical terms it can take advantage (and in part it does) of the large discounts that Russia is practicing in order to sell oil. And, more generally, to profit from the difficulties of Moscow, by now the weak partner of the anti-US alliance among the giants of the East. The Chinese decision of goes in this direction pay for supplies of Russian gas in rubles and yuan through the Sila Sibiry gas pipeline.
The Chinese economy falters and becomes a global problem
But even the latest data arriving from Beijing confirm that the Dragon's economy has now stalled. A little over a month since Party Centenary Congress, the forecast of recovery of the second largest economy on the planet has vanished: GDP, warns Nomura, will not rise more than 2,7%, halving the forecast rates, already greatly reduced. Slows export +7% (against an expectation of 13%), as well as the trade surplus, which fell below $80 billion in August. The slowdown is reflected in the currency market: lo yuan, having crossed the threshold of 6,95 against the dollar, it is one step away from 7, which has always been considered an almost insurmountable limit. And, session after session, the hope of a stock market rebound faded, despite the advice and suggestions of the managers. Mark the stepCsi 300 index of Shanghai and Shenzhen, the cradle of technology that suspended public transport on Monday to counter the Covid -19. Prices are at their lowest for four months, but it's doing much worse Hong Kong, headquarters of high tech made in China, slipped this morning to a 25-month low.
In short, not only will the Dragon economy fail to provide the recovery with the guaranteed propellant in 2008/09, when the double-digit growth of the economy helped decisively to overcome the Lehman Brothers crisis, but there is a tangible risk that the involution of the colossus of the East may represent an additional problem for the global growth, already marked by the retreat of globalization and the affirmation of a logic of blocks and the cold war.
The maladies of the Chinese economy: real estate crisis and technology
The signs of malaise are numerous: you don't see an outlet for real estate crisis exploded more than a year ago with i Evergrande problems and other brick groups. It is a sword of Damocles that weighs on GDP, given the importance of construction for the domestic economy in general and for public budgets in particular. Among other consequences, the protests of homebuyers, who have already paid the advances but do not see the moment when they will move into the finished house, have spread, an unprecedented fact. Hence a civil disobedience campaign based on the suspension of mortgage payments, which the authorities are trying to contain, facilitating moratorium periods and providing liquidity to local authorities to help builders.
The other sign of malaise concerns the tech, in Xi's sights since Jack Ma, patron of Alibaba, challenged the supremacy of the party (and of the banks of the regime) by proposing an online financial system with the listing of Ant. Since then, the president's ax has hit the new economy, tying the hands of the big names, from Alibaba itself to Tencent, imposing constraints on everything from private schools to the development of online games, with serious damage to the country's innovation .
Italian-style Chinese youth unemployment
The slowdown in the economy has made the goal of overtaking the US economy, already set for 2035, vanish. But, far more serious, it has affected the social elevator. China, already the land of full employment or nearly so, finds itself youth unemployment rates Italian. In the age group between 16 and 24, one in five young Chinese people cannot find a job, according to official data. Four times the unemployment rate found in the 25-59 age group.
Finally, the consequences of lockdown also imposed on key cities of Chinese industry in order to eradicate Covid. These closures, added to the real estate crisis, are bringing down the demand for raw materials and freezing growth. Even the recent one record drought has depressed activity levels.
China, PC Congress: Xi's road is all downhill
These are the emergencies looming over Congress which will almost certainly promote the third term five-year period general secretary for Xi Jinping who in 2018 had the Constitution changed to abolish the limit of two terms for the presidency of the Republic wanted by Deng Xiao Ping. 2.300 delegates representing 96 million members will be convened from 16 October for a week in the Great Hall of the People on Tiananmen Square to elect 200 members of the Central Committee (plus the same number of substitutes), who in turn will give their blessing to 25 leaders of the Political Bureau, whose most authoritative members, currently seven including the General Secretary Xi Jinping, will form the Politburo Standing Committee. There are unlikely to be any surprises, even if judging by the markets, the "shared prosperity" policy wanted by Xi is leaking.
