Following the collapse of the real estate sector, which represented 30% of the country's GDP, China is heading towards a recession. Many are asking: "Is China about to experience its '2008 crisis'?"
State of China's Economy
Official figures reveal an economic slowdown. GDP growth reached only 3.2% in the second quarter of 2024. Retail sales are stagnating, and youth unemployment has risen to 21%. The CSI 300 index has lost nearly 7% since the start of the year, marking the fourth consecutive year of decline.
Origin of the Problems
The bursting of the real estate bubble, which began in 2021, sparked a wave of issues. Construction projects are halted, and companies face bankruptcies. The government redirected resources to high-tech manufacturing, but recovery will take time and effort.
Prospects for Economic Stimulus
Economists call for a massive stimulus package focused on boosting consumption. The government remains hesitant. Another option is to recapitalize banks to revive lending. However, if decisive measures are not taken, China may face prolonged economic stagnation.
The situation is aggravated by rapid population aging and declining purchasing power. Without intervention, China could experience a long period of economic stagnation, with significant implications for the global economy and the country's political stability.
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