A Crisis of Confidence Is Gripping China’s Economy

Earlier this year, David Yang was brimming with confidence about the prospects for his perfume factory in eastern China.

After nearly three years of paralyzing Covid lockdowns, China had lifted its restrictions in late 2022. The economy seemed destined to roar back to life. Mr. Yang and his two business partners invested more than $60,000 in March to expand production capacity at the factory, expecting a wave of growth.

But the new business…