China Faces Weakening Demand Despite Expected Rate Cuts
The Chinese economy continues to face significant challenges, with weakening demand threatening the sustainability of growth. Expected cuts in interest rates, which were intended to stimulate economic activity, are unlikely to bring about significant improvements in the short term. Consumer spending has decreased in July and August, and manufacturing data indicates a slowdown in growth rates.
Analysts note that potential policy measures, such as reducing key interest rates, cannot be implemented instantly or significantly alter the current market conditions. Sustainable growth, which the government anticipates, is difficult to achieve against a backdrop of rising inflation and uncertainty within international trade.
In several sectors of the economy, such as real estate and consumer goods, severe stagnation is evident, highlighting deep structural problems. The average income level of citizens also hampers the recovery of consumer spending.
Despite marking the end of the pandemic, many Chinese people remain cautious about spending, further slowing down economic recovery. This situation is compounded by global economic challenges and a slow recovery in export demand.
Consequently, to accelerate growth, comprehensive and strategic government intervention is necessary, including more decisive fiscal and monetary measures. However, experts warn that any rapid solutions may have negative long-term consequences.
