Know why the economic condition of China has been battered and what are the four big reasons behind it

Posted on 28th Oct 2022 by rohit kumar

Even though China presents itself as a big power in the world, its internal condition is very poor. This has been confirmed by none other than a report of the Ministry of Finance issued by the Government of China itself. In this report, it has been said that China's fiscal deficit will reach 1 thousand billion dollars. The special thing is that this is not only the biggest fiscal deficit ever, but it has increased by almost 5 times during the last year. Chinese government figures are indicating that all is not well in China and the policies of President Xi Jinping have not been able to give economic momentum to the country. However, due to his policies, China's image in the world has been dented.

 

Xi to command for the third time

Talking about President Xi Jinping has been given command of the country for the third time. During his tenure of the last 10 years, China's image in the world has been that of an aggressive country and leader. China's isolation from the outside world has also increased during his tenure. Whether it is the tension in Doklam and Ladakh, including the border dispute with India, or other issues including the South China Sea with America or the separation from Taiwan, all appeared to be reaching their peak. There has also been a lot of upheaval in China's internal politics. This is the reason why this post has now been given in the hands of another instead of China's PM Li Keqiang.

 

China's relations with the outside world

China's relations with the outside world have not only deteriorated during the decade of President Xi's tenure but there has also been a tremendous demonstration against Xi's policies inside China. Protests in other provinces including Hong Kong, and Xi Jinping are testimony to this. All these have hurt China's economic situation somewhere, due to which the pace of its economic growth has been put to a halt. There have been other reasons for this.

 

Xi failed to lift the real sector

The biggest contributor to China's economy is the real sector there. This sector has steadily gone down during the decade of President Xi Jinping's tenure. All efforts by President Xi to save and bring it up have proved unsuccessful. Not only this, but due to the continuous fall in the prices of new and old houses in China, this sector has also suffered a lot. Not only this, but a huge gap has also appeared between the demand and supply in the real sector during this period. This has been a major reason for reducing China's economic speed. During this, the Chinese stock market also exploded.

 

wrong result of tax exemption

The tax exemptions given during the tenure of President Xi Jinping for the last decade have also been wrong. President Xi Jinping has also proved unsuccessful in controlling the rising inflation. The effect of tax exemption has also completely failed to accelerate the pace of economic growth of the country. Because of this, this pace may not have increased, but the fiscal deficit has increased. It has been confirmed in the government data that the expenditure of the government has also seen a boom during this period.

 

zero covid policy

President Xi Jinping's policies to prevent the spread of the corona epidemic in the country have proved to be wrong in restoring the economic situation. Citizens have also protested against this from time to time. The government has implemented a zero covid policy in China. Under this, there is a provision to impose a lockdown when a case of corona comes to the fore. 200 million people in the country are still forced to stay in their homes due to the lockdown. Because of this, small and big businesses have been badly affected. The continuing lockdown has snatched away the jobs of crores of people. All these have put brakes on the economic pace of the country.

 

Also Read: China Economy: A market condition in China is bad, foreign investors are preparing to exit