What China’s Slowing Economy Means for The Rest of The World
China's economy grew only 4% in the final quarter of 2021, the slowest pace seen since the second quarter of 2020, the New York Times reports. The stall in economic growth is likely due to a drop in property sales, slowed demand and Covid-forced shutdowns. Experts predict other economies will also lose momentum in the near future.
"The snapshot of China's economy, the main locomotive of global growth in the last few years, adds to expectations that the broader world economic outlook is beginning to dim," the NYT article reads.
Despite the major slowdown in the second half of 2021, China's economy still expanded a total 8.1% for the entire year. However, forecasts for 2022 show China's economy continuing to slow. Leaders in China are trying to prevent any economic fallout by cutting two key interest rates and increasing mortgage lending to home buyers, the Wall Street Journal reports.
"More stimulus measures [are] likely to be unveiled if domestic and external circumstances remain unfavorable," Eswar Prasad, a former head of the International Monetary Fund's China division told the WSJ.
Economies around the world are already starting to feel the pressure from China's slowing economy. "Manufacturers in Germany, Europe's biggest economy and industrial powerhouse, are feeling the squeeze by the slowdown in China, which was Germany's largest trading partner in 2020. German exports to China declined 4.2% in November year-over-year, to €8.9 billion—equivalent to $10.1 billion—while its exports to the U.S. surged about 15% to €11 billion over the same period, according to the federal statistics agency," the WSJ reports.