The question is clearly posed in the face of the uncertainties that are accumulating on the Chinese side, where growth is running out of steam.
Chinese GDP slowed more than expected in the third quarter: barely + 5% between July and September, a figure lower than expected after the sharp rebound recorded at the start of the year (+ 18.5% between January and March). The pace of progress is the weakest since early 2020, when the Covid epidemic practically brought activity to a halt in China.
The official growth figures communicated by the power in place in Beijing – often overestimated – are taken with a grain of salt by Western economists but the downward trend is there. There are several explanations: uncertainties related to the global economy are accumulating, the domestic recovery remains unstable and uneven, the slowdown in the real estate sector, power cuts and disruptions in supply chains.
This means that China is also a victim of the rising cost of raw materials and energy. In particular, coal, on which the country is very dependent to run its power plants and supply the industry with energy. On the health front, the Middle Kingdom was confronted last summer with an epidemic rebound presented as the most important in terms of geographical extent, which clearly penalized consumption. Finally, there are the problems of Evergrande, the number two Chinese real estate company which is bending under a debt of 240 billion euros difficult to repay. According to Swiss bank UBS, a contagion from the real estate crisis to the rest of the Chinese economy could cost an additional one to two points of growth.
The most direct impact to be expected is that on China’s major trading partners, which will see their exports drop. In Europe, Germany, the economic engine of the Old Continent, would be the first to be affected. For reference, over the past decade, China was driving nearly 30% of global growth, double that of the United States.