When you think about the economy your first thought is your situation, then the country where you live in and finally other countries around the world. The 2 biggest economies in the world are the US and China. If both of those countries are doing well, then the world is considered to be doing well.

In an article from Reuters, China’s economy grew much slower than expected in the 2nd quarter as protracted property downturn and job insecurity knocked the wind out of a fragile recovery. There is increasing speculation Beijing will need to add more stimulus to the economy.

China’s economy grew at 4.7%, the slowest since 2023. China’s government is aiming for growth over 5% which is low considering what it once was. The retail sector sales growth has slowed to a 18-month low as deflationary pressures forced businesses to slash prices.

Lynn Song, chief economist for Greater China for ING noted the road to hitting the 5% target growth remains challenging.

Among those reporting slower sales is Swatch Group, the world’s largest watchmaker, it reported a steep drop in sales and earnings amid weak demand in China.

New home prices continue to fall, battering consumer confidence and constraining debt-laden governments’ ability to generate fresh funds through land sales.

Linking to dividend paying stocks, as every country around the world moves from resources to low level manufacturing to higher level manufacturing to services, the nature of the economy does not change. This means the solutions offered by the government tend to be similar or what works in China also works in the US also works in many countries in Europe. As an investor you believe that your companies are best for you and they are different, but the reality is many similarities exist for other companies and countries. The simple phrase of profits = revenues – expenses is universal and owning a profitable company is always a good thing. Making profits and the ability to pay dividends is even better.

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