In China, consumption is not picking up, due to the caution of Chinese consumers, who note that there is a 20% unemployment rate among the young population, according to Coface.
According to this French credit insurer, even the Chinese government no longer publishes this data, «because it kept rising».
At the same time, housing prices are falling in China, causing a real estate crisis.
At a press conference, Bruno de Moura Fernandes, head of Coface’s Macroeconomic Research area, said that this drop in consumption affects the world in various ways. As an example, he explained that 60% of the world’s steel consumption is made by China.
Unemployment rate
De Moura Fernandes commented that the Chinese have increased their savings and have reduced their confidence in consumption.
Added to all this is the trade war between China and the United States, with geopolitical tensions having consequences on trade flows.
The U.S. unemployment rate was 3.8% at September 30, 2023, up from 3.6% at June 30, 2023.
China’s unemployment rate was 5.2% as of September 30, 2023, compared to 5.5% as of June 30, 2023.
The same analyst described the Chinese economy as rather sluggish, while the government is trying to revive activity with incentives, but without clarity that they are sufficient to revive the economy in a lasting way.
The Chinese economy is generally considered an emerging market and can be significantly affected by economic and political conditions and policies in China and surrounding Asian countries.
China’s economy, which has been in a state of transition from a planned economy to a more market-oriented economy, differs from the economies of most developed countries in many respects, including the level of government involvement, its state of development, its growth, exchange rate, foreign exchange control and resource allocation.
Although most productive assets in China are still owned by the Chinese government at various levels, the Chinese government has implemented economic reform measures that emphasize the utilization of market forces in the development of China’s economy and a high level of management autonomy.