Can China Afford Provocative Foreign Policy Now

Table of Contents

The News

The Covid-19 outbreak has brought China’s extraordinary, nearly half-century-long run of growth to an end.
China’s faulty policies have exposed many countries to vulnerabilities such as financial stress due to massive unpaid debts.
Chinese officials said that the world’s second-largest economy shrank 8 percent in the first three months of the year compared with a year ago.

Since opening up to foreign trade and investment and implementing free-market reforms in 1979, China has been among the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging 9.5% through 2018.
World Bank:
1. “Chinese growth story is the fastest sustained expansion by a major economy in history.”

The economy which survived the Tiananmen Square crackdown, the SARS epidemic, and even the global financial crisis of 2008 has now shrunk 8% in the first three months of the year compared with a year ago.
The five largest Chinese banks posted at least 10 percent profit declines for the first half of the year.
1. Industrial and Commercial Bank of China
2. China Construction Bank
3. Agricultural Bank of China
4. Bank of China
5. Bank of Communications are struggling

7 Chinese companies have filed for bankruptcy or restructuring.
The biggest problem:
1. Chinese Property market..!!
2. China Banking and Insurance Regulatory Commission (CBIRC) has said, China’s property market is the biggest “grey rhino”– a very obvious yet ignored threat.
3. Property market is prone to financial risks, as it is very deeply intertwined with the financial industry.