China's economic downturn: An unprecedented crisis has hit hard amid a sharp drop in domestic demand

China's economy, once hailed as the engine of global growth, is struggling to regain its footing after enduring its most challenging period in more than five quarters. The economic instability that began earlier this year only intensified, and the third quarter revealed a deepening crisis characterized by weak domestic demand and a steady decline in real estate.

Industry Impact and Pricing in Dollars:

The real estate industry, long a mainstay of China's rapid economic growth, is now at the center of this downturn. Property prices in major cities such as Shanghai, Beijing and Shenzhen have fallen by more than 15% compared to the same period last year. This downturn has shaken related industries, including construction, steel and cement, further worsening the economic situation. In dollar terms, the average price per square meter in these cities has fallen to around $3,200, a significant decline from the peak levels of the last decade.

Additional source of information:

The Economist  reports on China

IMF economic forecast  for China

Manufacturing, another key sector, also faces serious challenges. The Purchasing Managers' Index (PMI) remained below the 50-point mark, indicating contraction. Export orders fell and total output fell nearly 10% year-on-year, underscoring the difficulty of sustaining growth amid global uncertainty.

Chinese businessmen and economists consider:

Chinese business leaders and economists are increasingly concerned about a prolonged economic downturn. Li Wei, a prominent Shanghai economist, notes that "the government's efforts to stabilize the economy have so far been insufficient, especially in light of the deep-rooted problems in the real estate sector." Without significant fiscal stimulus and reforms to boost consumer confidence, the economy is unlikely to recover quickly, Wei says.

Meanwhile, many Chinese entrepreneurs are adjusting their strategies to cope with the new economic realities. Zhang Yong, CEO of a leading manufacturing firm in Guangdong, has focused on Southeast Asian markets to offset falling domestic demand. "The Chinese market is not as strong as it once was," Zhang says, "and we have to adapt or face the risk of being shut down."

Call for increased fiscal stimulus:

Economists are calling on the Chinese government to introduce more aggressive fiscal policy to counter the ongoing economic shortfall. Although the government has introduced some measures, including tax cuts and infrastructure spending, it has not been enough to reverse the recession. The lack of significant consumer spending and continued concerns about the housing market suggest that more needs to be done to stimulate the economy.

The International Monetary Fund (IMF) also spoke out, recommending that China increase fiscal stimulus to support growth. The latest IMF report said that without decisive action, China risks a prolonged period of low growth, which could have far-reaching consequences for the global economy.

China's economy is at a critical juncture, facing the most significant challenges in recent history. A downturn in the real estate market, combined with reduced domestic demand and insufficient fiscal stimulus, has left the economy teetering on the brink of a deeper recession. As Chinese business leaders adapt to this new reality, the government is facing growing pressure to take tougher measures to avert a prolonged economic crisis. The coming months will be crucial in determining whether China can stabilize its economy and return to a growth path.