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Friday, July 19, 2024

Biden calls China a ‘ticking time bomb’ due to economic troubles

The US president pointed to the country’s high unemployment and an aging workforce, saying: “China is in trouble.”

Joe Biden has called China a “ticking time bomb in many cases” because of its economic challenges, saying the country was in trouble because of weak growth.

The US president pointed to the country’s high unemployment and an aging workforce, saying: “China is in trouble.”

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“They have got some problems. That’s not good, because when bad folks have problems, they do bad things,” Biden said at a political fundraiser in Utah on Thursday. He said he did not want to hurt China and wanted a rational relationship with the country.

Biden’s remarks were reminiscent of comments he made at another fundraiser in June when he referred to President Xi Jinping as a “dictator”. China called the remarks a “political provocation”.

Those comments came shortly after US secretary of state Antony Blinken completed a visit to China aimed at stabilising relations that Beijing described as being at their lowest point since formal ties were established in 1979.

China’s economy fell into deflation in July, while factory-gate prices also extended declines. China may be entering an era of much slower economic growth with stagnated consumer prices and wages, contrasting with inflation elsewhere in the world.

The consumer price index, the main gauge of inflation, fell 0.3% in July, the National Bureau of Statistics of China (NBS) said, having flatlined in June. A survey of analysts had anticipated a 0.4% year-on-year decline.

Analysts said the data was a clear sign that the Chinese economy was weakening, which would spark concern for EU companies and economies for whom China was a key trading partner.

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July’s data was China’s first negative inflation reading since early 2021, when prices were weaker as the Covid-19 pandemic hit demand, and pork prices fell.

The United States, the world’s largest economy, has fought high inflation and seen a robust labor market.

Biden on Wednesday signed an executive order that will prohibit some new US investment in China in sensitive technologies like computer chips and AI. China, which has the world’s second largest economy, said it was “gravely concerned” about the order and reserved the right to take measures.