If China’s economy falters, can America avoid the same fate? China’s economic data has been showing weakness, and it’s gotten so bad that the country has stopped publishing certain economic data. The economy in China has gotten so bad that Xi Jinping, China’s president, has asked the country for “patience.” Joe McDonald reports in the Associated Press:
Chinese leader Xi Jinping has called for patience in a speech released as the ruling Communist Party tries to reverse a deepening economic slump and said Western countries are “increasingly in trouble” because of their materialism and “spiritual poverty.”
Xi’s speech was published by Qiushi, the party’s top theoretical journal, hours after data Tuesday showed consumer and factory activity weakened further in July despite official promises to support struggling entrepreneurs. The government skipped giving an update on a politically sensitive spike in unemployment among young people.
Xi, the country’s most powerful leader in decades, called for China to “build a socialist ideology with strong cohesion” and to focus on long-term goals of improving education, health care and food supplies for China’s 1.4 billion people instead of only pursuing short-term material wealth.
Since taking power in 2012, Xi has called for restoring the ruling party’s role as an economic and social leader and has tightened control over business and society. Some changes come at a rising cost as successful Chinese companies are pressured to divert money into political initiatives including processor chip development. The party tightened control over tech industries by launching data security and anti-monopoly crackdowns that wiped out billions of dollars of their stock market value.
“We must maintain historic patience and insist on making steady, step-by-step progress,” Xi said in the speech. Qiushi said it was delivered in February in the southwestern city of Chongqing. It is common for Qiushi journal to publish speeches months after they are delivered.
Economic growth slid to 0.8% in the three months ending in June compared with the previous month, down from 2.2% in January-March. That is equivalent to a 3.2% annual rate, which would be among China’s weakest in decades.
Action Line: Over the last three decades, the Chinese economy has become deeply entwined with nearly every other economy in the world. The question is, if China goes into recession, can the U.S. and the rest of the world avoid the same fate? You need to prepare now for what it takes to survive. Click here to subscribe to my free monthly Survive & Thrive letter, and make yourself a Survivor. When you need help, I’m here.
