The three figures that describe imports and exports, PPI (producer's price of industrial products) and the latest GDP released by the Chinese regime on Dec. 10 showed a trend of slowdown. Experts think that the Chinese economy has met with its greatest challenge as international consumers have grown increasingly suspicious of Chinese-made products and the world has been experiencing a global financial crisis.
Import and Export Numbers Decline
The main Bureau of China's Customs said that exports fell 2.2 percent in November for the first time in seven years, while it grew 19.2 percent in the previous month. Imports dropped 17.9 percent in November, after increasing 15.6 percent in October.
From the second half of 2007, the growth of exports has been steadily slipping. According to analysts, inferior quality and products that have been made with toxic chemicals are responsible for the slowdown.
Import decline is even more apparent. Continuing to drop for the last five months, it is down to a decline of 17.9 percent in November compared with last year, although it saw a 33.7 percent increase from the same period last year in July and 15.6 percent increase in October.
The products imported to China are mainly used to be processed for exports. With waning consuming confidence and export numbers continuing to fall, experts are not optimistic of China’s future production of export goods.
China’s Economy Faces Unprecedented Challenges
Mr. Huang, a provincial government official in Guangdong Province, said that enterprises in Guangdong haven’t faced greater difficulties since the 1990s and said that next year is a critical year. “A factory with 100,000 employees can suddenly collapse. This was impossible before. The situation is serious,” said Huang.
Recently there was news that over fifty thousand business went bankrupt in Guangdong. Huang believed the real situation might be even worse.
Unemployment Causes Social Problems
Sichuan Province has a higher number of migrant workers. As of Nov. 18, 280,000 migrant workers have returned home because enterprises throughout the region had closed, according to China’s official Xinhuan News Agency. Experts believe that if the economy continues to worsen, there could be even bigger trouble for China. They say that unemployment will not only cause people to lose confidence in the economy but also cause a series of social problems.
Compared with developed nations, such as the U.S. and some European countries, China does not have an established social security system or unemployment insurance. As the unemployment number continues to grow, increasing social unrest may threaten the Chinese Communist regime.