China’s economic struggles create spillover worries
- August 20, 2023
- Posted by: Quatro Strategies
- Categories: Business & Politics, China
China’s recent economic troubles could have significant repercussions beyond its borders, impacting global markets and economies in various ways.
China plays a major role in global trade, accounting for about 30% of global growth. Any domestic economic challenges in China can lead to far-reaching implications for markets around the world. The softening of Chinese demand has already resulted in declining exports and imports. While this could reduce inflationary pressures, it might negatively affect producers and exporters in other markets, leading to economic slowdown and job losses. Additionally, a prolonged slump in Chinese exports could disrupt global supply chains.
A slowdown in China’s economy could lead to the export of deflation to the world. This could hurt corporate profits in the US and other countries, impacting their economies. Companies that have significant ties to China are already experiencing lower sales and reduced outlooks. Widespread declines in China’s consumer prices might lead to higher prices for consumers in other countries, affecting personal-care products and cars, among others.
The weak consumer spending and domestic demand in China are linked to risks in the domestic property market. Housing assets constitute a significant portion of Chinese households’ wealth, and uncertainty in the property market is making people hold onto their cash instead of spending it. The turmoil in the property market is impacting China’s overall growth by affecting industrial output, discouraging spending, eroding government revenue, and increasing financial sector risks. Chinese developers’ liquidity constraints could lead to defaults on US-denominated bonds.
The housing crisis and broader economic challenges in China could create a lasting drag on future global growth. As China struggles to address its economic issues, its traditional measures of growth might not be reliable anymore. This could have a negative impact on global markets and economies that depend on China’s growth.
Overall, the challenges in China’s economy have the potential to disrupt global trade, trigger deflation, and slow down growth, affecting various sectors and markets worldwide.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
Global M&A surges to $2.6 trillion in 2025 amid AI boom, strategic boardroom shifts
Global mergers and acquisitions (M&A) have surged to $2.6 trillion in value for the first seven months of 2025, the highest tally for this period since the post-pandemic dealmaking boom of 2021, driven by a strategic push for growth and the intensifying global race to dominate artificial intelligence.
This rebound in deal value has emerged even as the number of transactions has declined, with U.S. megadeals and AI-related investments offsetting the chilling effects of U.S. tariff uncertainty and geopolitical friction.
DR Congo surpasses Peru as world’s second-largest copper producer in 2023
In 2023, the Democratic Republic of the Congo surpassed Peru to become the world’s second-largest copper producer, according to official data from both countries. The Congo produced approximately 2.84 million tons of copper, as reported by the country’s central bank. Meanwhile, Peru’s output…
Despite tariff disruption, U.S. retains grip on global NGL market
U.S. exports of natural gas liquids (NGLs) surged to a record high in April despite significant setbacks in trade with China, the world’s top ethane buyer. New data show that U.S. NGL exports reached 2.9 million barrels per day (bpd), fueled by abundant shale gas production and robust demand from countries beyond China. This resilience underscores how global energy markets are adapting to the escalating U.S.-China trade war by rerouting supplies and forging new trade relationships.
NGLs, which include ethane, propane, and butane, are critical feedstocks for plastics and petrochemical production, as well as for heating and cooking. Ethane, in particular, is a cornerstone of China’s petrochemical industry. Nearly half of all U.S. ethane exports have historically gone to China, which itself relies almost entirely on the U.S. for its ethane supply due to a lack of viable alternatives.