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Beyond Evergrande’s Troubles, a Slowing Chinese Economy

  • September 23, 2021

China’s freight truck manufacturing capacity has ballooned to 1.6 million trucks a year in a market where long-term sales estimates are far fewer than a million trucks a year. Truck dealerships across China are now clogged with rows of unsold trucks.

Car sales were also weak last month, adding to uncertainty about whether consumer spending will stay strong in China even as Evergrande struggles. After construction and government spending, the auto industry is one of the biggest sectors of the Chinese economy, playing nearly three times as large a role as exports to the United States.

An acute shortage of computer chips has separately affected the production and sale of cars in China, muddying the picture.

“The market for car sales is generally in a downturn, partly because of the chip shortage,” said Cui Dongshu, the secretary general of the China Passenger Car Association, a Beijing-based industry trade group.

While China faces broad overcapacity and other worries, many economists in China still express more confidence than economists elsewhere that the country can weather its troubles. Economists in China note that the Chinese government has more ability than most to set interest rates and control large movements of money in and out of the country.

“China,” said Mr. Xu, of Deloitte, “still has a lot of tools.”

Keith Bradsher reported from Beijing, and Alexandra Stevenson from Hong Kong. Li You and Cao Li contributed research.

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