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President Xi’s stubborn commitment to Covid Zero means China is guaranteed to miss that goal this year: Economists now forecast gross domestic product growth will hit just 4.5%, according to a new Bloomberg survey, with Goldman predicting GDP will rise just 4.0% as noted above. See this in the chart below and learn more here.

China GDP Gloomy Outlook 2022-05Concerned that the unemployment rate is approaching levels where the dreaded “social unrest” becomes a possibility for China. China’s surveyed jobless rate climbed to 6.1% in April, the highest since February 2020, and sent the yuan plunging to the lowest level since late 2020. See this in the chart below.

China Unemployment 2022-05These charts do come from their base data of the CCP, who have long been suspected of “cooking the books.” So the situation could be far worse. Judging from the draconian activities of the CCP to control their people via Covid restrictions, this could be the case.


At the Right Wire Report, we have reported extensively about the situation in China – “A House of Cards.” This piece was written two years ago, explaining what would and what now is happening in China. Other pieces we have reported on include:

So how is investing doing in China recently? Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company or country. It signals optimism and plans for the future.

The latest China CapEx investment from 2020 is 43.54% of its GDP. For comparison, the world average in 2020 based on 151 countries is 23.76%. Learn more here and see China’s CapEx historical trend.

China-CapX 2021

These meteoric rates of CapEx have built China based upon the global demand from offshore companies to the West. Since about 2010, the rise has stopped as they have reached market saturation. This game is over. This means China at best, will likely lose 20% of its GDP just to get back to the norms with the rest of the world – often, these trends tend to overshoot, at least in the short run.

The future does look highly problematic. Their latest read on their PMI – learn more here and see the summary PMI chart below. A reading under 50 indicates economic contraction. PMIs are leading indicators and tend to predict economic situations 3 to 6 months into the future.

China-April-PMI-2022

The long-term positive economics for China are reversing negatively. In the short-term, self-imposed Covid lockdowns, geopolitical disruption, and a coming global recession could be the triggers to set off a chain reaction to see this Chinese house of cards fall. And fall hard, that reverberate back into other Western economies, especially the US. These latest Chinese GDP and unemployment data points are just the beginning.

What can China do? You do what all power-hunger regimes do – start a war. Taiwan should consider stocking up on red paint.

By Tom Williams at Right Wire Report

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Featured photo by Mil.ru, CC BY 4.0 <https://creativecommons.org/licenses/by/4.0>, via Wikimedia Commons