China’s Deficit
Over the past few months, we’ve covered events all over the world, with a broad emphasis on the US. But one country that’s missed the spotlight more recently is China. So, what’s going on with China? And what are they up to economically? Afterall, for all investors, including those in US Markets, what economic behemoths like China do can affect domestic economies through supply chains, jobs, war, and foreign-exchange rates. It is important to stay up to date on a global scale as an investor for these reasons. Most recently, China, or its government to be more specific, is facing a growing lack of cash — using an increase in debt to fill the gap. This gap is a result of the latest wave of Omicron hitting China back in March, leaving a sharp contraction in government revenue.
Concurrent with China’s growing deficit are ambitious infrastructure plans from President Xi-Jinping. The plans, which surfaced in late April, appear to call for a national push towards infrastructure development. Everything from waterways to cloud computing infrastructure is covered in the plan, however, it is unclear how fast and at what scale the project will be constructed.
What do you think about China’s revenue issue, and to what extent will the project be delayed?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
