New Delhi, Sep 21 (IANS): While China has been viewed as the world’s manufacturing hub, the country’s economy, that was once growing at a robust pace, has hit a rough patch with key sectors in contraction mode and unemployment on the rise, according to a new report.
The Chinese economy is faltering, and the government is working tirelessly to conceal the depth of its crisis. Official GDP growth figures continue to hover around 4.5–5 per cent, but independent analysts and institutions suggest the real number is far lower, closer to 2–3 per cent, according to an article in the Kathmandu-based hamrakura.com news website.
“The Chinese Communist Party (CCP) has long relied on economic performance as a cornerstone of its legitimacy. Growth figures are celebrated as proof of competence, while dissenting voices are silenced. But the cracks are now too wide to ignore. The property sector, once the engine of household wealth, has collapsed,” the article states.
It underscores that real estate investment fell by nearly 18 per cent in 2026, leaving millions of apartments unsold and families unable to build financial security. Retail sales, a measure of consumer confidence, grew by barely 1 per cent in June 2026, reflecting a population that is saving rather than spending. Debt levels, particularly among local governments, have soared to unsustainable heights.
The CCP’s has cracked down with more control instead of economic reforms to revive the weak consumer demand in the country. Official statements describe the economy as “within a reasonable range,” but this is merely a part of a political cover-up. Independent economists, including those at the IMF, warn that China’s slowdown is structural, not cyclical. By inflating figures, local Chinese officials secure funding, and the central leadership maintains the illusion of prosperity. But this facade is cracking. Satellite imagery of night-time lights, a proxy for real economic activity, shows stagnation in industrial zones once thought to be booming. Social media is filled with stories of shuttered factories, unpaid wages, and workers protesting outside locked gates,” the article points out.
It highlights that China’s GDP growth is declining due to several reasons which include the property crisis that has destroyed household wealth, leaving consumers cautious and unwilling to spend. Debt has ballooned, particularly in local governments, that borrowed heavily to fund infrastructure projects with little return.
Exports, once a reliable engine of growth, are now under pressure as global demand slows and trade tensions rise. Even in sectors where China appears strong, such as electric vehicles, the reality is grim: price wars have eroded margins, and more than half of major automakers are reporting losses, the article states.
It further points out that the situation is worsening rapidly as even civil servants and teachers in secure government jobs now face delayed salaries and unpaid benefits. In Shenzhen, a city long portrayed as China’s success story, homelessness is rising. Elderly citizens line up at dawn to secure spots in markets to sell vegetables, a stark symbol of shrinking opportunity. The middle class is cutting back on essentials, signalling a collapse in confidence which can make only matters worse.
