The recent economic slowdown in China has highlighted the urgent need for major structural changes in the country’s economy. The Chinese government has recognized this and has been taking steps to reform key sectors such as real estate and banking in order to spur growth. These reforms include reducing tax liabilities, pushing for a reduction in interest rates, and implementing measures to motivate growth.
However, it remains uncertain whether these changes will be sufficient to address the current slowdown. The Chinese economy is facing challenges that require a comprehensive and sustained approach to overcome. While the government is optimistic that the economy will recover by 2024, the effectiveness of their measures remains to be seen.
The consequences of this economic slowdown are not only limited to the country as a whole but also impact the domestic population adversely. One of the main concerns is the potential loss of jobs for new graduates, as companies may scale back their hiring plans due to the economic downturn. Additionally, the savings of individuals in the real estate sector are also at risk, as it is estimated that 70 percent of Chinese household savings are invested in real estate.
This dual impact on employment opportunities and personal savings can have severe consequences for the Chinese population. It may lead to increased domestic crisis and instability, posing a serious challenge to the legitimacy of the Chinese Communist Party. The government will need to take prompt and effective action to mitigate these risks and restore confidence among the people.
In conclusion, the Chinese economic slowdown necessitates significant structural changes in the economy. While the government’s efforts to reform key sectors and stimulate growth are commendable, it remains to be seen whether these measures will be sufficient. The adverse impact on domestic employment and savings highlights the urgency to address the slowdown and ensure stability in the country.
Source: Dr Gunjan Singh, Assistant Professor at Jindal Law School, OP Jindal Global University. The Quint (Opinion) [Note: URLs have been removed as per instruction]