China Recession: After Covid, the effect of increased inflation and economic recession in China is being seen on the world. However, China has controlled inflation in its country to a great extent. Along with this, it is also trying its best to come out of the economic recession. According to the latest report, China’s factories have gained momentum and retail sales have also increased in August. The report released by the government on Friday indicated that the economy may gradually recover from the situation after the global pandemic. However, despite busy activity in restaurants and shops, the data showed continued weakness across all key property sectors. Real estate developers are struggling to repay loans due to sluggish demand. Real estate investment declined by 8.8 percent on an annual basis in August. The decline has been increasing continuously since the beginning of the year. To reduce the burden on banks, the People’s Bank of China or the central bank said late Thursday that the reserve requirement for most lenders will be reduced by 0.25 percentage points by Friday.
Retail sales in China increased 4.6 percent year-on-year in August
According to the central bank, this will make more money available for lending to strengthen the foundation of economic recovery and maintain appropriate and adequate liquidity. According to the report released on Friday, retail sales in August increased by 4.6 percent on an annual basis, auto sales increased by 5.1 percent. There was a slight increase of 2.5 percent in retail sales in July. Industrial production grew at an annual pace of 4.5 percent, the fastest increase since April. It had increased by more than 3.7 percent in July. Julian Evans-Pritchard of Capital Economics said in the report that the trends in August were slightly better than expected. China’s economy grew 0.8 percent in the April-June quarter compared to the previous quarter.
What will be the impact on India?
After Covid, the whole world is looking at India as a big market and manufacturing hub. Due to this, in recent times almost big companies of the world have expressed their desire to establish their manufacturing base in India. However, at present China’s dominance in the manufacturing and export sectors is much greater than India’s. But, after coming out of the recession, China will make every effort to return to its previous situation. For this, the Central Bank of China has already started working on the strategy of providing loans etc. to the construction sector of its country.
What is India’s preparation?
India is making full preparations to compete with China. The historic India-West Asia-Europe Economic Corridor was announced on the first day of the recently held G-20 summit. India, America, UAE, Saudi Arabia, France, Italy, Germany and European Union will participate in it. Through this corridor, India, West Asia and Europe will now be directly connected through rail and port. With its construction, trade between India and Europe will increase by about 40%. It is being considered as the answer to China’s Belt and Road Initiative (BRI) corridor. This corridor was announced by Prime Minister Narendra Modi along with US President Joe Biden, Saudi Prince Mohammed bin Salman and leaders of the European Union. On this occasion, PM Modi said that today we have reached a historic partnership. In the coming time, it will become an effective medium for economic integration of India, West Asia and Europe. At the same time, Biden said that America will invest in a new rail line from Angola towards the Indian Ocean. This will create jobs and increase food security.
India is becoming an economic power: Aghi
Mukesh Aghi, President of the US-India Strategic and Partnership Forum (USISPF) said that India is becoming an economic power. Currently the Indian economy is worth 4,000 billion dollars and in the next two years it will be 5,000 billion dollars. He said that the success of the G20 summit also reflects the leadership of Prime Minister Modi.