Shannon Brandao
Shannon's excerpt from the article: "Forbes [excerpt]: #China’s #economy suffers many problems, and some are beginning to look like those that made it so hard for America to break out of its Great Depression in the 1930s. True, China has not experienced a stock market crash. That is different. What China does have in common with that historic America is the loss of #confidence in the economy’s structures and in its future. For America, the crash destroyed confidence. For China the problem lies in the policies of now President-for-life #XiJinping. Prospects are far from promising.
One key sign of this undesirable condition is the drop in #bank #lending. Always an indicator of #business and consumer spending plans, Chinese demands for bank credit in December were, according to the People’s Bank for China (PBOC), 16% below year-ago levels and almost 20% below consensus expectations. This picture is all the more remarkable because Beijing has engaged in considerable stimulus spending on infrastructure, and the PBOC has reduced interest rates during the past year and lavishly provided markets and financial institutions with liquidity, increasing the broad money supply some 9.7%.
The most likely explanation why Chinese people and businesses have failed to take advantage of the infrastructure spending and this easy credit is that they see little prospect for gain. They have lost any sense that things will improve, at least that they will improve enough make the risk of going into #debt worthwhile. According to Beijing’s National Bureau of Statistics, the nation’s consumer confidence index has fallen almost 10 percent from its high of last March and stands at a lower level than ever, even during the pandemic and the needless lockdowns and quarantines that followed it under Beijing’s zero-Covid policies. Business confidence has picked up slightly from late 2023 but remains depressed by just about any historic standard even going back to the early part of this century when data collection began."
#news #business