China’s next recession may be lurking on its balance sheets
China eked out 0.4% in GDP growth in the second quarter from a year ago. As much as authorities have tried to put a rosy spin on this news, the economy isn’t looking encouraging. A wave of mortgage boycotts is roiling the property market, a rural banking crisis is brewing, consumer demand is sluggish, and the government has yet to fully quit its disruptive zero-covid strategy. The turmoil in Chinese markets has sparked debate among some economists over the possibility of a “balance sheet recession.”
What is a balance sheet recession?
A recession is a significant slide in economic activity across an economy. It’s typically defined as two consecutive quarters of decline in a country’s real GDP.
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