Why China’s economy is weakening – NZZ Akzent

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In this podcast episode:

Zhao Liyi recently became unemployed. Her employer, the largest provider of online educational programs, felt compelled to mass layoffs because he was suddenly only allowed to do non-profit business. This is what the central government wanted in order to give poorer families access to educational opportunities. Zhao Liyi thus became a victim of the so-called tech crackdown, a series of regulatory measures by Beijing that politicians have imposed on the technology sector. In addition to the area of ​​online education, the gaming industry and the fintech sector are also particularly affected.

Liyi is now completely dependent on her husband’s income, the middle-class family eats out less often and buys fewer clothes. Many in China are feeling like the Liyis these days, says Kamp. Suddenly unemployed, forced to save. Even during the Chinese New Year, tourist destinations are deserted. People have adjusted their expectations, consumption is declining.

And then there is the Chinese zero-Covid policy. Our correspondent reports that lockdowns are becoming more frequent so that the government can still prevent major outbreaks despite Omicron. The Chinese pandemic doctrine harms the vegetable market as well as large manufacturers. For the current year, most analysts expect gross domestic product to grow by around 5 percent. “These are completely different dimensions than we are used to from China,” says Kamp. The economic prospects clouded over. You can see that in the macroeconomic figures, but also in discussions with the population.

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