Growing pains: China’s faltering economy tests leadership’s nerve

theguardian.com:

On his tour of the southern Chinese city of Shenzhen last week, Li Keqiang, the premier, tried to send some positive energy at a time many citizens have been complaining of economic hardship.

“China’s opening will continue. The Yellow river and the Yangtze river will not flow backward,” Li said, striking an upbeat tone while visiting Yantian Port, a gateway to Europe and North America, two of China’s biggest markets.

“The waters of Yantian Port will also flow incessantly, and not only will continue to maintain your advantages, but also expand your advantages,” Li added. Yet last year, the traffic was far from incessant: Covid rules shut the port, delaying deliveries over Christmas. This spring, similar restrictions forced vessels to queue to enter.

Since the start of this year, China’s insistence on a zero-Covid policy has caused much inconvenience and uncertainty for its people and the struggling economy, prompting grave concerns inside the country about what comes next.

“The property sector is ailing, investments are all falling, and people are saving rather than spending,” says Hong Hao, a prominent market analyst whose social media account was censored this year after downbeat remarks about the economic outlook.

Hong highlights three big headaches for Beijing policymakers: Covid, property and troubling relations with major western countries. “But there are obstacles all over the place really, and it’s hard to discern which one is the biggest.”

These stumbling blocks will almost certainly lead to China missing its own economic growth target of “around 5.5%” this year, which Li set in March. In another worrying development, the July unemployment rate among 16- to 24-year-olds reached a record 19.9%, according to the National