China's Economic Prospects Are Gloomier Than Ever

China’s economic prospects are gloomier than at any point in recent history.

The dire state of the property market is the chief problem. Prices and sales have fallen for more than a year; policymakers have failed to prevent the correction. During the stock rout of 2015 retail investors had a slogan: “Sell your stocks and buy real estate.” No one is chanting it these days. To make matters worse, the government’s rescue plans do not look up to the task.

For many citizens, it feels as if China never truly emerged from its dismal zero-covid years.

An economic recovery that was expected to play out in 2023 instead faltered during the first half of the year, leaving the country mired in deflation.

Pessimism has clouded the market ever since.

More than 200m Chinese people own stocks, and officials risk taking the blame.

Although Chinese authorities still hope to attract investment, foreign investors are fleeing. They have been net sellers for months, dumping $2bn-worth of shares in January alone. The sell-off has been so severe that some experienced foreign investors are shutting down.