On Monday, Treasury Secretary Janet Yellen issued a warning about the potential contagion effects of the decelerating Chinese economy.

However, she maintained that a recession in the United States is unlikely to occur this year.

The release of new data on Monday revealed that China’s gross domestic product (GDP) experienced a modest growth of only 6.3% in the second quarter (April to June).

This sluggish performance can be attributed to declining exports, weakened consumer spending, and an extended downturn in the critical property market, Fox Business reported.

The lower-than-anticipated GDP figures depict an anemic economy struggling to recover from the impacts of the COVID-19 pandemic and stringent lockdown measures.

Furthermore, official data indicated a record-high youth unemployment rate in China, with the joblessness rate for individuals aged 16 to 24 reaching 21.3% last month.

Yellen, in an interview with Bloomberg, acknowledged the dependence of many countries, particularly those in Asia, on robust Chinese growth to drive their own economies.

She expressed concern that slow growth in China could lead to negative spillover effects for the United States.

However, she emphasized that despite the economic slowdown, the US labor market remains robust, and she does not anticipate a recession in the near future.

Written by staff