If you thought the US was the only country struggling with its economy, think again. COVID hit everyone hard, especially places like China, which cut off travel and pretty much everything immediately and for so long.
This year was supposed to be a year of recovery. Now that China is reopening and getting back to business as usual, predictions were that the nation’s economy would soon begin to flourish, as it seemed to do initially.
However, recent rate cuts made by the People’s Bank of China (PBOC), the central bank, have made that seem less likely.
Much like the Federal Reserve in the United States, the PBOC has issued a number of interest rate cuts. These are supposed to encourage lending and bolster investments.
However, it appears to be a case of too little, too late. And according to some, it could mean impending doom for the communist economy.
The latest interest rate drop was announced recently, and within hours, futures and stocks worldwide began to drop dramatically, fearing that the boost the economy needed and was expecting won’t happen now.
As Reuters said, “Analysts at BofA global research said in a note that ‘such marginal easing’ would likely help prevent growth from slowing sharply, but was ‘unlikely to offer a strong boost to reverse the growth slippage in the near future.’”
China’s economy is currently sitting at a 40-year low.
China's economic growth for 2022 is expected to have been among its weakest in four decades. https://t.co/DRDURVwAZc
— Breitbart News (@BreitbartNews) January 15, 2023
Naturally, it’s also affected oil prices worldwide. Prices fell by 48 or 49 cents after China’s interest rate announcement, even as supply tightens.
Now, the hope is that come the next Politburo meeting, China will take a stronger stance. However, with sources close to the situation saying that the Chinese regime isn’t all that willing to do what is needed right now, focusing on politics than economics, that looks unlikely.
In any case, things are not looking good for the Chinese economy.