GLOBAL ECONOMIC TREND UPDATES

China Won’t Power Global Economic Recovery. The strength of China’s economy helped pull the world out of the Great Recession. We forecast that the nation, over $40 trillion in debt, will not muster the power to drive a worldwide recovery from its current crisis.
China’s stimulus spending has been modest, leaving manufacturers more dependent on foreign markets damaged by the global shutdown. Also, in the last 10 years, China has become more self-sufficient in many raw materials, so it needs to buy less from countries such as Brazil and Australia, which were buoyed through the Great Recession by China’s purchases.
In addition, Chinese consumers are being cautious in making discretionary purchases, with many emphasizing saving instead of spending.
Manufacturers across Europe and Asia report that Chinese customers are ordering everything from computer chips to farm machinery… but in much smaller volumes than before the pandemic struck.
China will have the only large economy to grow instead of shrink this year, according to the IMF, which foresees China’s GDP expanding by 1 percent in 2020.
“China will still be a growth engine for the world,” said Christine Wong, a scholar at the National University of Singapore, but “if China grows at 1 percent, it’s not going to be pulling anybody very fast.”
TREND FORECAST: One percent GDP increase is no “growth engine of the world.” In fact, China’s 2019 GDP, prior to 2020 global lockdown, grew at 6.1 percent, its worst result since 1990.
 As trade wars heat up and exports and imports decline, the Chinese government will continue to push the nation toward a self-sustaining economy with more “Made in China” products, parts, and services.
Canadians’ Debts are Almost Double Their Incomes. Canadians’ household debt rose to 176.9 percent of their disposable incomes in 2020’s first quarter, expanding by 1.3 percentage points, according to Statistics Canada.
In other words, Canadians owed $1.77 for every dollar of disposable income they earned.
Canadians now owe more than $2.3 trillion, including $1.53 trillion in mortgage debt and $802.1 billion in consumer credit and non-mortgage loans.
The imbalance was worst among low-income households, the agency noted.
The drift toward greater debt was well under way before the economic shutdown, said Priscilla Thiagamoorthy, an economist at BMO Capital Markets. “With the economic downturn deeply impacting income growth and low rates enticing borrowing, the debt ratios will likely hit fresh record highs in the coming quarters, leaving households even more indebted.”