The current Russia-Ukraine conflict, high levels of global inflation, and China’s draconian Covid Zero policy have all combined to put the Chinese economy under pressure.
Chinese policymakers’ duty is about to become more challenging as a result of the recent power outage and the unusually hot weather experienced nationwide.
The source of the issue
According to studies, the post-lockdown rebound sputtered as mortgage boycotts sparked a new decline in the real estate market and the one-time boost from reopening faded. Due to the Shanghai business centre’s closure, a worsening slowdown in the real estate market, and continuously weak consumer spending, China’s GDP narrowly avoided contracting in the June quarter.
Being the second largest economy in the world, the fact that china’s economic slowdown will have an impact on India is an irrefutable understatement. More seriously, the West is considering diversifying its sourcing sources and lowering its reliance on China. India now has a chance to expand its share of the market. India can aspire to compete with China as a global manufacturing hub if it can further enhance its manufacturing sector, allowing it to draw more foreign investment.
Effect on India
It’s interesting to note that the majority of the overall imports from China in FY21 were commodities and goods for which India first implemented the production-linked incentive (PLI) system, including textile, agro, electronics, pharmaceuticals, and chemicals.
According to studies, China’s exports to India increased to $57.51 billion in 2017, a 34.5% increase from the previous year. According to the trade data made public by China’s General Administration of Customs, Indian exports to China decreased to $9.57 billion, a loss of 35.3% from the previous year.
Thus we can safely conclude that if not dealt with, the current rate at which china’s economic stance is regressing will be catastrophic to Indian export and commerce