Wall Street Journal: China Hides Decline in Its Share of Global GDP 0 12

China's share of global GDP is shrinking. This raises concerns for international companies, as their investments in China may now yield lower profits.

According to the Wall Street Journal, China's share of global GDP last year was sixteen and a half percent. This is about two percentage points lower than the peak four years ago. GDP is the main indicator of the size of an economy. It measures the economic activity of a country's population and businesses.

Typically, a decline in GDP leads to job losses. In the case of China, the urban unemployment rate reached a six-month high in February, exceeding 5 percent.

Given the habit of Chinese authorities to conceal data, the actual figures may be higher. Domestic deflation and a weak currency have limited the size of China's economy. For global companies investing in the Chinese market, the country's declining GDP is a cause for concern.

In 2016, Inditex, the parent company of the fashion brand Zara, identified China as its priority. By 2018, the company had opened 600 stores there, but by 2025, the number had shrunk to nearly one hundred. Changes began as early as 2015. Due to the weakening of the Chinese currency, the company's sales revenue in China decreased in U.S. dollars. Additionally, there is stiff competition from domestic brands.

Since 2018, Inditex has reduced the number of its stores in China by about 80 percent.

Today, its sales in North and South America exceed sales in China.