China economy loses steam amid weak demand, coronavirus and floods, analysts say
- Fresh data shows that China’s economy is still growing, but not as quickly as many economists thought
- The Chinese government has failed to stimulate domestic demand, with analysts calling for more stimulus in the second half of 2020
Facing a multitude of headwinds at home and abroad, from floods along the Yangtze River, to coronavirus outbreaks in the West, and an inability to stimulate domestic demand, analysts said China’s economic recovery lost its head of steam in July.
While the economy is still growing, it is being powered largely by the old levers of property and infrastructure investment, with President Xi Jinping’s stated aim of “dual circulation”, where China is powered by local demand, yet to kick into gear.
Analysts warned of new slumps as the government cracks down on food wastage by forcing restaurants to serve fewer dishes, and tightens food imports due to fears of the coronavirus being imported on food products.
Domestic demand remains weak, and the main driver of economic activity is state-led investment and stockpiling of industrial goods and commodities
Coronavirus was found on Brazilian chicken wings imported into Shenzhen this week, the third such instance on foreign meat or seafood in seven days, meaning more tightening in the imported food supply is likely.
