Ahmedabad: China, the world’s second largest economy, has faced many major setbacks in the last few years due to internal economic issues apart from the Corona epidemic. Following sluggish domestic and export demand, coronavirus lockdowns and the Evergrande crisis have shaken the economy and led to an estimated $18 trillion loss in domestic wealth.
China, which has enjoyed rapid economic growth for the past two decades, is now facing serious challenges. The world’s second largest economy has been grappling with the bursting of the largest real estate bubble in history for the last 4-5 years. China’s property market has seen a sharp decline over the past three years.
Evergrande, China’s biggest real estate company, is projected to lose $18 trillion in domestic wealth by 2021. The shocking thing is that the amount of wealth that has flowed into China in the last 3 years is more than the loss suffered by America during the global financial crisis of 2008-09.
Over the past few years, China’s economy has been burdened by excessive debt, overconstruction and excess manufacturing capacity. These problems are having serious consequences domestically and internationally. China’s biggest decline began with the arrival of Trump. China suffered huge losses due to the trade war started by China after the election of the United States President.
Later, China’s largest realty company, Evergrande, collapsed as local real estate demand faltered. Not only this but many other real estate companies are under heavy debt and lack of demand for properties has further increased the crisis.
In many parts of China, there are examples of ‘ghost towns’ or abandoned cities being built. Production capacity in industrial areas far exceeds actual demand, affecting prices and economic stability.
