The economic problems China is having are impacting people at the street level. Every month this goes on, Trump’s leverage over Xi Jinping’s government grows:
The downturn is squeezing urban workers and entrepreneurs the ruling Communist Party is counting on to help transform China from a low-wage factory into a prosperous consumer market.
Headline economic numbers still look healthy. Growth in 2019 is forecast at more than 6 percent, down only slightly from about 6.5 percent last year. But it is propped up by higher government spending, which masks sharp declines in other areas. Those are spooking the public and discouraging spending, which could make the downturn worse.
A tariff war with Washington over Beijing’s technology ambitions is adding to anxiety over job losses and tumbling sales of cars, real estate and consumer goods.
“I am worried about my job security and have cut spending on everything including clothes, vacations and changing smartphones,” said He Siying, who works for an investment consulting firm in Beijing.
Apple Inc., General Motors Co., jeweler Tiffany & Co. and others say sales are down. Auto purchases shrank in 2018 for the first time in three decades. Japan and South Korea report lower exports of components for smartphones and other electronics sold in China.
The decline in economic growth that peaked above 14 percent in 2007 is partly intentional. Regulators clamped down on lending in late 2017 to cool a debt boom. But the downturn was sharper than expected.