but young unemployed are almost 20%

The economy grew by 4.5% in the first three months of the year: +4% was expected. Domestic consumption increased. However, the increase in bank savings points to a drop in private spending in the coming months. In the future, the astronomical debt of the local authorities weighs heavily, which reached 7.6 billion euros. Foreign investors are taking precautions and moving part of their assets to other countries.

Beijing () – In the first quarter of 2022, the Chinese economy rebounded by +4.5% annually, a rate higher than expected, which stood at 4%, and a sign of recovery after Xi Jinping suspended its draconian “zero Covid” policy in December. However, youth unemployment (16 to 24 years old), which remains high, dampens this enthusiasm. According to the National Bureau of Statistics, unemployed Chinese youth accounted for 19.6% of the total in March, up from 18.1% in February.

The reopenings at the end of the repeated massive isolations boosted consumption, spending on services and investment in infrastructure. To some surprise, the real engine of the recovery continued to be exports, which were expected to fall due to weak global demand due to higher energy prices. However, Chinese industries still had orders to ship in warehouses due to anti-Covid restrictions.

The positive figures did not impress Asian stock markets, which tended to lose on the day. The Chinese recovery is not entirely convincing, and not only because of the level of youth unemployment. The fall in prices and the increase in bank savings suggest that there will probably be a further drop in domestic consumption.

Xi will also have to find a solution to the problem of the astronomical debt of local governments. According to the International Monetary Fund, it amounts to 57 billion yuan (7.6 billion euros), almost half of the national GDP. Analysts say, however, that the real figure could be even higher. And as the central government has said it will not intervene with capital injections, indebted local authorities have begun to sell off their salable assets.

Beijing also has to deal with capital flight. To reduce risk, many foreign investors have moved part of their assets in China to other Asian markets. This is due to concerns about highly restrictive policies, such as those of the pandemic, combined with Xi’s crackdown on the private sector and Washington’s trade and financial restrictions on Beijing.

Apple is one of the foreign companies that has taken production quotas out of China. The US telephony giant inaugurated today the first of its two megastores in Mumbai (India); the other will open on April 20 in New Delhi. Thanks above all to the Taiwanese assembler Foxconn, 7% of iPhones are produced on Indian soil for a value of 6.4 billion euros.