The US is now facing some widely predicted recession because China’s economy is slowing down. This is shocking news that China’s service sector downing its activities and this is an eight-month low in August.
According to many economists, if the second-largest economy falls, the US economy falls too.
EY chief economist Greg Daco and EY senior economist Lydia Boussour wrote in a note on Tuesday, “While there is growing optimism about a ‘soft landing’ for the US economy, global challenges still cloud the horizon with China’s economic turmoil emerging as a top risk”.
This is shocking that China has shown growth over the last several decades, but recent reports show that China’s growth is now declining by 2% compared with last year which is the lowest since 1976.
China’s GDP grew at a rate of 6.5% annually in the second quarter. The reason behind that is predicted, property investment and shrinking consumer confidence. Wall Street firms are showing lower expectations for overall growth this year in China.
Overall the US economy’s trade exposure is a small percentage of GDP to China. The US economists have revealed that the direct trade between China and the US is a small portion rather than dependency.
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