As the world's attention is captivated by the political drama unfolding in Washington, an equally important but less visible event is taking place in Beijing with the conclusion of the Third Plenum, a significant summit that occurs every ten years. While the political chaos in the United States continues, the leaders in Beijing celebrate President Xi Jinping's achievements with a positive memo following the forum, despite the lack of concrete solutions to the economic issues plaguing China.
China's economy is facing a slowdown marked by alarming growth rates, particularly evident in the property market crisis that is adversely impacting household consumption. The reliance on massive infrastructure projects and property investments to sustain economic growth has led to a situation where household spending remains low, contributing to an ongoing trade imbalance and a record-high trade surplus.
The imbalance in China's economy is reflected in its trade figures, with monthly trade surpluses reaching all-time highs, potentially triggering a trade war with the United States. The country's struggles with declining household consumption and the continuing decline in the property market have global implications, particularly affecting commodity markets like iron ore and copper. The reluctance of Beijing to implement substantial measures to address its economic challenges further exacerbates concerns among investors and commodity traders about the future trajectory of China's economy and its impact on global markets.