Slowdown of the Chinese Economy

Just half a century ago36 million peopledied in China and

Few outsiders heard about it..Today, when China’s nouveaux

riches buy a few cars,the Rest of the world pays

ATTENTION.

What caused the Chinese economy’s MELTDOWN?

What forced the Super Powerto review its economic

system?

THE CHINESE ECONOMY

Second largest economy

Market Based Economy

(Based on Demand and Supply)

Largest ExporterSecond largest

ImporterTop Destination for

FDI

IMPACT OF EUROZONE

CRISIS

1/5th of the Chinese exports go to Europe.

EUROZONE CRISIS

The value of € DEPRECIATED against the $.

Purchasing power of the European countriesdeclined.

Moreover, the value of ¥ (Yuan) APPRECIATED

23% against the €.

The Chinese goods became costly for the European countries, reducing their imports from

China.

Also, FDI from Europe to China fell 27.9%.

Chinese Premier Wen Jiabao says,

“Currently and in the future, China's employment situation will become more complex and more severe.”

The country with the world’sLargest population feels

tremors due to decline in WORKFORCE?!

In 1980, One-Child Policy

was officially introduced.

In 2010,National Population Census revealed-

People aged between 15-59(the core working age population)will decline to 29.3 million till 2020.

Chinese labour intensive economy struggles withSHRINKING supply of labour.

Labour shortage & rapid inflation of wages.

Too engrossed in meeting the World demands and no time for its own citizens.

Is this the case with

PEOPLE’s Republic of China?

INFLATION

BANKING ASSET QUALITY ISSUES

SLOW CORPORATE PROFIT GROWTH

Capacity utilisation dropped from

80% to 60% in 2011.

Government will spend $157 billion on INFRASTRUCTURE.

Tens of thousands of empty apartments without tenants already exist.

WHO HAS THE MONEY TO BUY THESE?

In 2012,foreign firms invested

$83.4 billion in factories and other projects here,down 3.8% from the year

ago.

Capital flow from 27 European

and 10 Asian countries tumbled.

When China sneezesthe World catches cold.

China is the first- or second-largest trading partner of 78 countries,

accounting for 55%of the global GDP.

CHINA

GERMANYAUSTRALIABRAZIL

INDONESIATAIWANJAPANAFRICANCOUNTRIES

THANK YOU