Industry insiders point out that the current state of China’s economy is facing the biggest problem in 30 years. The current state of China’s economy results from a shaking investment market, massive foreign capital outflow, and the complicated investment situation in China.
In an article, Frédéric Lemaître, a Beijing correspondent for the French newspaper Le Monde, said that “China is struggling.”
Frédéric cited Shan Weijian, CEO at private equity firm PAG, that China is currently undergoing “a deep economic crisis.” Weijian said that China’s economy is in the worst shape in 30 years.
According to the report, the three economic experts have raised their opinions. Among them, Shan Weijian is currently very cautious about possible financial investments in China.
In an interview with the online media outlet SupChina, Stephen Roach, former President of Morgan Stanley Asia, listed three significant problems in China.
He claimed that the zero-Covid policy, proximity to Russia, and tech reining in result from “a shockingly rigid decision-making process and an inability to admit a mistake.” According to Stephan, the other reason is that the Chinese government “is not being nimble enough to come up with a different strategy.”
Jörg Wuttke, President of the European Chamber of Commerce in China, said in an interview on April 28 that China’s economic growth will not reach 5.5% in 2022 as expected. He added that “it will be below 4%” because of the zero COVID policy.
According to the Chinese media outlet Think China, economists said China’s economic growth would undoubtedly fall below 6% this year. In addition, professor Chen Bo at Huazhong University of Science and Technology said that the unemployment rate went up by 1%, meaning that 5 million people lost their jobs in the epidemic.
On May 2, an independent U.S. economic think tank hosted a symposium titled “Insiders’ View on China.”
At the meeting, Wenchi Yu of Harvard’s Kennedy School noted that China had experienced the harshest crackdown on the technology sector last year. She said it’s “so broad, so intense and so fast that it has shaken the investment market as never before.”
She added that current epidemic control in Shanghai and the impacts of the Russia-Ukraine war have added to the uncertainty of China’s economic outlook.
Jason Tan from Jeneration Capital said that the Chinese market is “very volatile.” Meanwhile, other experts shared that investors should consider risks and be selective when investing in China.