Caixin

This year’s dramatic geopolitical changes have significantly altered the calculus for foreign investment in China as large European enterprises are increasingly taking the lead and Japanese businesses are retreating in manufacturing and advancing in services. American companies, on the other hand, are frozen as the US government imposes tough sanctions on China’s tech sector and as manufacturers weigh strategic moves back to the US.

Despite the wave of interest rate increases from central banks globally, China has gone the other way and cut borrowing cost, signalling a control in inflation in the country. But food prices, in particular pork products, have been soaring, and the continued weak domestic demand amid ongoing Covid-19 restrictions and a crisis of confidence among consumers worried about jobs and wages, pose major risks to China's economic stability.

The global semiconductor shortage seems to be over as demand for consumer electronics falls, leaving smartphone manufacturers stuck managing high inventories. However, China’s wafer foundry expansion momentum has not slowed, as part of the country's core objective to develop the sector amid tightened US sanctions.

Amid tightening Covid-19 controls, disrupted logistics and e-commerce user base plateauing in 2020, Chinese e-commerce companies are facing tightened scrutiny and slowing growth in revenue. Furthermore, advertising — the most important source of revenue for internet companies — has been weak for more than a year. This leads Chinese tech companies to turn their attention overseas, and those without an overseas development plan will be left behind. Caixin journalists tell us more.

With China’s economy already facing drags from consumer spending and the real estate sector, the slowdown in goods exports poses a significant problem as they make up a sizeable share of the country's GDP. Will Beijing reconsider some of the policies such as its zero-Covid policy, tech sector crackdown, and restrictions on real estate?

China's central bank is scrambling to increase demand for borrowing by using nearly every instrument in its toolbox. But the impact has so far been limited, as Chinese companies and households are trapped in a crisis of confidence in the economy amid slowing growth and the impact of strict anti-Covid measures. What more can China do to save the economy?

China has more than 170 million sandwich-generation families. While the sandwich generation grew up in the 80s as "little emperors", they are feeling the strain now with the double pressure of looking after their children and the elderly. Most of them focus on "children first", but if a married couple’s parents live in two different cities, that makes it even harder to care for all four parents at the same time.

The belief that immigrants would ruin the employment market is unfounded, says economics professor Li Jingkui. With bold and ambitious entrepreneurial spirits, immigrants are more likely to be “job creators”, rather than “job takers”, while the resulting increase in demand for goods and services even supports economic growth.

In a preliminary agreement, US officials will get their long-sought access to vet accounting companies based in mainland China and Hong Kong and review audit documents related to Chinese businesses. Will this stem the tide of Chinese companies being delisted from US stock exchanges?