look news india
Ahmedabad: China has announced an economic package worth billions of dollars to revive the economy, but at present no significant impact is being seen. According to government data, foreign investors withdrew $8.1 billion from China during the third quarter of the current financial year.
Automakers Nissan Motor, Volkswagen AG, Konica Minolta Inc, Nippon Steel Corp, among the top companies withdrawing foreign investment from China, have decided to exit Chinese joint ventures. International Business Machines Corp. closed its hardware research laboratory in the country, affecting about 1,000 employees.
A total of $12.8 billion is slated for withdrawal in 2023, the largest amount since 1998. If this trend continues, China could see an annual net outflow of foreign direct investment (FDI) for the first time since the 1990s. This is the first time in 30 years that foreign investors are continuously pulling their money out of China.
China’s economy is currently facing its worst recession since the 2008 financial crisis. Donald Trump’s re-election as America’s President may create more trouble for China.
Trump in his campaign speeches promised to impose import tariffs of up to 60 percent on Chinese goods, another sign of the US-China trade war. The country’s debt-to-GDP ratio reached 366 percent in the first quarter, indicating that the country has 3.66 units of debt for one unit of GDP.
The International Monetary Fund has already lowered its forecast for China’s economy. China’s economy is expected to grow by 4.8 percent this year, while the government’s target is 5 percent. According to experts, China’s economy may become as stable as Japan’s in the 1990s.