China’s Economy faces bankruptcy amid slowing consumption

Last Updated on May 29, 2024 7:49 am

The dire state of the Chinese economy, mirrored in the collapsing supermarket sector. Supermarkets, once bustling with customers, now stand eerily quiet, their shelves piled high with unsold stock. The lack of customers and slow-moving goods paint a grim picture of an economy in distress. The situation is a stark reminder of the economic challenges China faces, as businesses struggle to stay afloat amidst dwindling consumer demand and mounting financial pressures. This crisis not only threatens the survival of these supermarkets but also signals deeper economic issues that could have far-reaching implications.

How bad is China’s economy a salesperson Miss Wang responsible for supplying supermarkets in Chongqing revealed to the media whode livers goods can feel that there’s a problem with the market this year. Domestic media outlets published an article this week stating that the saleswoman lying to the front line revealing another side of the market,it is found that goods and supermarkets simply couldn’t be sold.

Stepping into a supermarket on the weekend despite it being busy there were only a few scattered customers inside most products on the shelves have been in stock for over 6 months to more than a year. This year business at the supermarket was slow and the goods were moving sluggishly.  Once a vibrant hub of commerce, the street now wears a deserted look, a stark contrast to its former self. This was a place where customers and visitors thronged, their hands filled with products of their choice, their faces brimming with satisfaction. This area, once boasting the highest product turnover but now the same place is grappling with a sluggish market response for the past two years. Essential items like water, seasoning, and paper hygiene products are gathering dust in the warehouse, untouched for over six months. The once bustling street is now a silent witness to the slow rhythm of the market.

One consequence of the unsold Goods is an increase in bad debts almost all supermarkets operate on credit and this year collecting payments has been particularly difficult. Even in a supermarket covering 700 to 800 square meters they can’t settle a 1,000 RMB approximately $140 payment.

Local shopkeepers mentioned that many stores profits have continued to decline sometimes even if the goods are sold they’re not enough to cover expenses like utilities rent and staff salaries leaving no money for settlements. It’s common for the 3 month settlement period to be extended to 6 months or even a year if a store goes out of business or a new owner refuses to settle the account sales persons have to cover the losses themselves. However, to meet the targets they can’t avoid selling on credit and distributors have to take risks, in the past, during holidays or peak seasons distributors would rush to stock up but now with the market cooling often the first wave of inventory hasn’t been depleted when brands send the second wave of goods.

Owners of downstream stores either refuse to take the goods or sign agreements with distributors if they can’t sell the products the distributors have to buy them all back resulting in a continuous influx of goods from upstream and obstructing the circulation of goods downstream. Many distributors are collapsing under tremendous pressure, for example a distributor of paper hygiene products was pressured with shipments one after another leading to a stockpile of over 10 million RMB approximately US$ 1.4 million. Despite the surface appearance of prosperity, they had actually resorted to mortgaging their houses and cars and borrowing money just to get by. The dire state of the retail industry reflects the grim situation of the Chinese economy on the brink of collapse.  More and more analysts believe that the Chinese economy has reached an impasse from which it cannot escape posing a further threat to the CCP regime and even affecting the entire world.

Writer and current affairs commentator Guang Fang categorically stated last year that the Chinese economy is like a patient with multiple organ failures with each problem compounding the next making it beyond treatment Fong estimated at the time that the Chinese economy wouldn’t last more than 2 years with 2025 being the CPC’s deadline. Once the economy stalls the central government’s control over local areas weakens and the collapse of the Chinese economy will occur sooner than a military invasion of Taiwan.

Despite the appearance of prosperity, the reality is a market struggling with sluggish sales, unsold goods, and increasing bad debts. The situation is so dire that even large supermarkets are unable to settle small payments. The pressure is immense on distributors, leading to a continuous influx of goods, obstructing the circulation downstream. This grim scenario reflects the precarious state of the Chinese economy, teetering on the brink of collapse, posing a significant threat to the CCP regime and potentially impacting the global economy.

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