- Chinese business owners and consumers told The New York Times they’re concerned about the economy.
- China is dealing with declines in manufacturing and trade as well as record-high youth unemployment.
- Larry Summers said last week China’s economic proespects had been “greatly exaggerated” in the past.
Chinese consumers and business owners are in a panic as the country faces economic headwinds and has even lost its status as the number one trading partner for the world’s largest economy — the US.
The New York Times’ Li Yuan spoke to more than a dozen people who are struggling with the economic reality in China: declines in exports and manufacturing, a record-high youth unemployment rate, and even deflation.
“The most terrifying thing is that everyone around me is at a loss of what to do next,” Richard Li, who owns an auto parts wholesale business, told the Times, adding his business’s revenue in the first half of this year dropped 15% from a year prior. “I used to believe that our country would become better and better.”
Former US Treasury Secretary Larry Summers said in an op-ed in The Washington Post last week that China’s economy was “finally hitting a wall” after years of optimism. Summers said China’s economic prospects, previously considered very good, had been “greatly exaggerated,” and that he think the US gross domestic product “will exceed China’s for another generation.”
After being the US’s top trading partner for much of the 2010s and in the early days of the pandemic, China slipped from that spot, Insider’s Cork Gaines previously reported. Mexico has since taken the top spot, accounting for 15.4% of all the goods exported and imported by the US in the first four months of 2023, according to data compiled by the Federal Reserve Bank of Dallas in July. China accounted for only 12%.
The Times reported consumers and business owners in China were worried because they could not see how the economic downturn would end.
“I can’t see any way to make money in this country,” Andy Wang, a 35-year-old who quit his job as a bank teller to apply to graduate school in Austria, told the outlet. Referring to last year when new political leadership included all allies of Chinese leader Xi Jinping, Wang said: “The corrective ability of this country was lost after that.”