Why China’s GDP in downtrend?

China's GDP growth slowed sharply in the third quarter of the current calendar year. China grew 7.9 percent in the second quarter but the growth rate fall down by 4.9% during the third quarter. China's economy has recovered rapidly since the Corona crisis. Production increased as global consumption increased. As the demand for raw materials increased, so did the price. Two reasons that find on negative growth rate in China are Evergrand collapse and power crisis due to coal shortage. This has had a major impact on China's economy. Adding to the above, the emergence of new coronavirus cases in some areas has also slowed the growth rate.

China is the first nation in the world for speedy recovery after the pandemic when others were clue-less fought with coronavirus pandemic. Massive fuel crunch is crimping the country’s growth engine. There is a considerable impact on the normal production rate in China because of the power crisis. Factories and units across the country have to curtailed output in September as an increase in coal prices followed by a power shortage. China’s power shortage threatens lengthy disruption to the global supply chain. Customers in Europe and the US must wait longer for supplies as factories are forced to slash operating capacity.

The turmoil in the real estate sector after the collapse of Evergrand accounts for about a quarter of China’s GDP. In August, real estate bigge Evergrande in China warned of default and subsequently missed payments to investors in its offshore US dollar-denominated debt. Chinese Communist Party's (CCP) latest policy of marginalizing inequality among the people is another hidden reason that impacted the growth rate. President Xi’s new “common prosperity” campaign to narrow the gap between rich and poor and create “material and spiritual wealth. In the name of common prosperity, China targets business entrepreneurs and celebs. This makes businesses fall in line has impacted growth.