The problem in the real estate sector has stopped the cycle of the economy

- The dragon has fallen ill and attempts to treat it are ineffective

Whether it's the recent falling stock market in India or the US Federal Reserve's hint that interest rates will be hiked further, China's weak economic conditions are being blamed for many events. China's high debt and low consumption situation is increasing world concern. Its fire is also affecting relatively prosperous India to some extent.

It is noteworthy that China's population is declining and unemployment is increasing. The unemployment rate among 16 to 24-year-olds has soared to 21 percent in cities, and the alarmed government has stopped publishing the data.

At present, the property sector is in the worst condition in the entire country. Evergrande, China's largest real estate company, has filed for bankruptcy in the United States. In other words, the company has sought protection so that Chinese claimants cannot seize the company's assets in America. This is the same company that defaulted on its debt payments in 2021 and sent shockwaves through financial markets around the world.

Evergrande has more than 1,300 projects in more than 280 cities in China and is now in debt negotiations with creditors. The company is an electric car manufacturer and also owns a football club. Its total debt is more than 300 billion dollars and it is the largest debtor company in the real estate sector in the whole world. Trading in its shares has been suspended since last year. As it revealed last month, it has lost $80 billion over the past two years. Another giant property company, Country Guard, reported a loss of $7.6 billion for the first six months of the current year. Many other big companies in China's real estate sector are running out of money to complete projects. If the projects are not completed, the buyers will not pay their installments and due to this, the financial condition of the companies will deteriorate.

According to the information that has come out so far, the development process in the Chinese economy has slowed down and the purchasing power has stopped. Also, both imports and exports have decreased in the country. It is only natural that there are fewer people buying from China when the growth is slowing down around the world. Thus, there is a situation like excess month in drought.

For China, there is no option but to speed up the economy, but as there are no buyers for the goods made there, the cycles of its factories have stopped. China's central bank has unexpectedly cut interest rates in a bid to boost demand. Being forced to cut twice in three months shows just how impatient China has now become to revive the economy.

It may be noted here that global brokerage firm Morgan Stanley has recently downgraded India's rating to Overweight and China's rating. The company says China needs to improve its property and labor markets.

As the weak condition of China is a matter of concern for the whole world, the downward trend is continuing in the stock markets including India. China is a major manufacturing hub and almost all major companies in the world manufacture in China. Thus, China is leading in production and export. It is also a major importer of commodities including various metals. China accounts for half of the world's consumption of metal. That is why the decline in both its export and import is alarming.