To help you understand what's happening in commercial real estate and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
Just how badly is China’s economy doing? And what does that mean for everyone else?
Long a juggernaut, China is clearly slowing. It will likely miss its 5% GDP growth target for this year, coming in at around 4.8%. As enviable as that may sound to advanced economies, it’s slow by China’s standards. It’s also remarkable for growth to come in below Beijing’s official goal — a rare failure to live up to what the Communist Party has dictated. Chinese manufacturing is still contracting. Foreign investment is poised to actually fall for the first time in China since 1990, if not earlier. Consumers are skittish and not spending.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The root of China’s woes is a real estate bust that hit a few years ago and is nowhere near bottom. Unlike in the U.S., where house prices are up sharply since the pandemic, boosting household wealth. Chinese households have lost $18 trillion as the value of their homes has fallen. In China, property is the middle class’s preferred asset to own, whereas Americans are more financially diversified.
There’s probably not much Beijing can do to really turn the economy around. So far, it’s mostly relying on monetary stimulus, lowering borrowing rates, allowing smaller down payments on homes, making more cash available to borrow, etc. It may soon announce new spending programs, too. All of this seems like a stopgap.
One thing you can expect from China’s familiar playbook: Leaning on exports, which are up by double digits this year, though not enough to reach the 5% GDP goal. Encouraging exports also lifts demand for raw materials, boosting commodity prices.
The rising tide of cheap Chinese exports is intensifying global trade conflicts, leading to more tariff barriers targeting Chinese goods. Canada just levied a 100% tax on Chinese electric vehicles, plus 25% duties on Chinese steel and aluminum imports. The European Union may soon follow suit on EVs, with a tariff rate of up to 35.5%. Either U.S. presidential candidate is bound to impose additional tariffs on China: Donald Trump, more broadly, Kamala Harris, in a more targeted way. Each of them would cite not just unfair economic competition but also national security concerns.
U.S. importers are already diversifying away from China, whose products now make up 15% of imports here, down from 21% in 2018. Businesses that relied on cheap Chinese goods will have less access to them. Ditto for U.S. consumers, for whom cheap Chinese products took some sting out of inflation. In the long run, though, it could also give American manufacturers a shot to regain market share.
Look for relations between Beijing and Washington to continue to worsen — over trade and more — as China struggles to reboot its export-driven economic mode
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related stories
-
2026 Disney Dining Plan Returns: Free Dining for Kids & Resort BenefitsPlan your 2026 Walt Disney World vacation now. Learn about the returning Disney Dining Plan, how kids aged three to nine eat free, and the exclusive benefits of staying at a Disney Resort hotel.
-
How Can Investors Profit From AI's Energy Use?Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
-
The Economic Impact of the US-China Trade WarThe Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
AI Heads to WashingtonThe Kiplinger Letter There’s big opportunity for AI tools that analyze MRIs and other medical images. But also big challenges that clinicians and companies will have to overcome.
-
The AI Doctor Coming to Read Your Test ResultsThe Kiplinger Letter There’s big opportunity for AI tools that analyze CAT scans, MRIs and other medical images. But there are also big challenges that human clinicians and tech companies will have to overcome.
-
The New Space Age Takes OffThe Kiplinger Letter From fast broadband to SOS texting, space has never been more embedded in peoples’ lives. The future is even more exciting for rockets, satellites and emerging space tech.
-
Rising AI Demand Stokes Undersea InvestmentsThe Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
-
What DOGE is Doing NowThe Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
-
A Move Away From Free TradeThe Letter President Trump says long-term gain will be worth short-term pain, but the pain could be significant this year.
-
The Explosion of New AI ToolsThe Kiplinger Letter Workers and consumers soon won’t be able to escape generative AI. Does that mean societal disruption and productivity gains are right around the corner?
