If you were advising the President of China, you would have a difficult time because for much of the time the President has been in power or raising to power, China was in double digit growth numbers and the numbers could be trusted. The growth of China made it the 2nd largest economy in the world, infrastructure projects were being built in and around China for the Belt and Road program. The news was good news, but times have changed.

In an article by Zen Soo of the Associated Press, China’s growth is down, missing official forecasts, and youth unemployment is up. There is a weak property sector which for many years contributed 25% of the GDP as well as the largest property developer in China, Evergrande posted a loss of $81 billion for the past 2 years including debts of $300 billion.

The ruling party in China expects 5% growth and the department of National Bureau of Statistics says the government will adjust policies to stabilize growth.

Harry Murphy Cruise of Moody’s Analytics noted the Chinese economy is going from bad to worse.

The weak economy means more government spending, cuts in interest rates and trying to free up credit to more businesses.

Exports have declined 12.4% from the same period in 2022.

Retail sales rose 3.1% from the same period in 2022.

Industrial output have increased 4.4% in June compared to 2022.

Linking to dividend paying stocks, China was once the go to country for almost everything but COVID lockdowns and companies moving operations to India and Southeast Asis means the Chinese economy will not grow at double digit rates anymore. Chinese leaders have greater capacity to encourage growth than many countries around the world, but things have changed and they are not going back to where they were.

There are more questions than answers, till the next time – to raising questions.