China's economy relies heavily on manufacturing and exports, but inflation and COVID restrictions have affected the status quo. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...
China’s economy is losing momentum amid slowing external demand, after it grew 4.5% in the first quarter due to the end of COVID restrictions. Manufacturing activity fell deeper into contraction in May. Meanwhile, activity tied to services and construction fell sharply during the month. Exports fell in May, as consumers worldwide cut back on goods they want but don’t necessarily need.
China’s property market remains a major drag on growth. Home sales are weak, price growth has cooled, and new housing starts have continued to drop. Excess leverage and overbuilding by developers for several years has led to debt stress in the real-estate sector and empty dwellings in many Chinese cities. Those problems mean Beijing can’t use its old playbook of subsidizing housing to boost the economy.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A host of stimulus measures are in the works to try to prop up growth: new spending on infrastructure projects and lower interest rates to support lending.
Despite China’s economic woes, its retailers are thriving in fast fashion, the trend of catering to fast-changing consumer tastes in clothing. Firms like Uniqlo, H&M and Zara once dominated it, but online-only Chinese retailers Shein, Temu and AliExpress, a unit of retailer Alibaba, are gaining ground. The fast-fashion industry has many critics, due to its tendency to use cheap fabrics for clothes that get trashed after going out of style, but Chinese retailers seem well-suited to the business model.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Trump's Economic InterventionThe Kiplinger Letter What to Make of Washington's Increasingly Hands-On Approach to Big Business
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
Kiplinger Special Report: Business Costs for 2026Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
Breaking China's Stranglehold on Rare Earth ElementsThe Letter China is using its near-monopoly on critical minerals to win trade concessions. Can the U.S. find alternate supplies?
-
America's Surprising Strengths in Manufacturing and ExportsThe Kiplinger Letter Despite common perceptions that the U.S. doesn't build things anymore, American factories are still hard at work. A special report from The Kiplinger Letter.
-
The Economic Impact of the US-China Trade War
The Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
