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Global Economic Recession: The condition of China like the recession in America in 2008, will the whole world be affected by it?

Photo:AP The condition of China like the recession in America in 2008

Highlights

  • The whole world may be in the grip of recession
  • Sri Lanka is most at risk
  • 20 percent fear of recession in China

Global Economic Recession: China Everything is not going well in me. Coronavirus China’s economy has been badly affected by the outbreak. Retail inflation also increased in the June quarter. The economy grew by just 0.4 per cent, the lowest in two years. From the figures released by the Chinese government on Friday, the sound of economic slowdown has started to be heard. in 2008 America How did China get on the road to recession? what India Will he also have to bear the consequences? At the same time, we will also try to understand further whether the economic recession is really going to come in the whole world?

Banks froze common man’s money

Since April of this year, customers of local banks in many provinces of China are unable to withdraw their money. Due to the cash crunch, many banks in China have banned withdrawal of money. It has been said in a report that this has upset more than 4 lakh customers so far. About $6 billion has been frozen. China’s economy is worth $17.5 trillion. One third of this is related to real estate and allied industries. But last year, Evergrande, a big Chinese real estate company, refused to deposit the loan taken from banks. Since then the situation got worse. The company has a debt of $300 billion.

2008 US situation

Chinese real estate companies have borrowed a lot from the bank. Now the people of China are not paying the EMI of the houses sold by those companies. He says that his employment has been damaged due to Corona. He does not have enough money to pay the loan installment. Also, the finished projects are not getting new customers. This has created a money crunch with the builders. The Chinese government has refused to help. The same situation happened in the US in 2008. The companies there had disbursed loans without any security, which could not be covered later. Due to this, America went through the period of the biggest captive of the century. Now a similar situation seems to be happening in China.

China’s economy stalled for two years

of china National Statistical Bureau (NBC) According to the data released by the U.S. in the April-June quarter, the growth rate of the world’s second largest economy has been 0.4 percent. However, China achieved a 2.5 per cent year-on-year growth in GDP in the first half of 2022. NBS spokesman Fu Linghui said about the slowdown in the economy, “China has suffered a lot from the coronavirus. Domestically, the impact of the epidemic is still there and the supply chain is also in grip with dwindling demand. We are working to improve.” For this, new policies are being made, as well as efforts are being made to increase the pace of development by reducing the external instability and uncertainties.

high probability of recession

Bloomberg recently conducted a survey. This was done in order to find out which countries of the world are most likely to be in recession. According to the survey, there is a 20 percent possibility of recession in China. The biggest threat is to Sri Lanka. There it is 85 percent. At the same time, there is a risk of recession of 40 to 50 percent in the countries of America and Europe.

Why can there be a recession in the world?

The biggest reason for the slowdown in the world is the inability of the global supply chain to function properly. No country has remained untouched by the corona pandemic. Almost all the countries have come under its grip. Restrictions are still in place due to Corona in some places. Due to these restrictions, factories and production are not able to work as before. By the time the world was dealing with this epidemic, the war between Russia-Ukraine started. Which forced even the countries with big economies to kneel.

What will be the effect of recession

Once the economic downturn hits, everyone starts focusing on survival. Investors start withdrawing money from the market. Raw ones start getting expensive. And the demand slowly starts decreasing. And to run a country, it is necessary to work properly with demand & supply. Companies start firing employees working here. People do not have money to spend in their hands, those who have they start saving it for the future. This has the biggest impact on small business.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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