It is obvious that China’s economy continues to decline and market demand is weak.
Regarding inflation, input prices rose for the first time in 3 months due to high raw materials prices. Selling prices, on the contrary, fell for the sixth month running, an effort by firms to promote sales.
Previous official figures showed that China’s small and medium enterprises contribute more than 50 percent of tax revenue, generate more than 60 percent of GDP, perform 70 percent of technological innovation, provide more than 80 percent of urban labor employment, and account for more than 90 percent of the number of enterprises.
However, the latest data from the China Association of Small and Medium Enterprises (CASME) shows that the China SME Development Index (SMEDI) was 88.3 in August, unchanged from the previous month and lower than the same month last year. This reflects “a lack of business confidence” and “weak market demand.” The SMEDI ranges from 0-200, with 0-100 being the depressed range that indicates declining or deteriorating economic conditions.
In September, several financial institutions lowered their expectations for China’s GDP growth in 2022. The Asian Development Bank lowered its GDP growth forecast for 2022 to 3.3 percent in September, 1.7 percentage points lower than forecast in “Asian Development Outlook 2022.”
On Sept. 30, China Index Holdings (CIH) released its ranking of sales performance by China’s real estate companies from January to September this year. According to the ranking, the average sales volume of the top 100 real estate companies for the first nine months was approximately $7.6 billion, down 45.1 percent year-on-year.
Does the Chinese Communist Party (CCP) have a plan to save the economy?
Chu Hanshi, a veteran of Chinese finance in the UK, told the Epoch Times that a normal country or government could save the economy through political or economic reforms. But the CCP is a totalitarian government, and within it, there are different interest groups, all with vested interests. Any reform is tantamount to “revoking the life of those with vested interests,” which means “revoking the life of the CCP itself.” Therefore, as long as the CCP is in power, there is no way to restore China’s economy.
Regarding the situation that the CCP focuses on political infighting instead of developing economics, Chu Hanshi believes that social conflicts will intensify and public discontent will rise. In order to shift the conflicts and discontent in society, the CCP will probably close the country again, engage in self-reliance domestically, or even make a desperate attempt to attack Taiwan by force. But no matter what they do, the CCP is accelerating its own demise.