China Must Resolve Real Estate Crisis and Not Rely on Exports Alone, Expert Warns
Listen to the full version
China’s economy has struggled to meet expectations over the past year, with the persistent slowdown in the real estate sector proving a major drag, Lu Ting, Nomura’s chief China economist, said at the 2024 Greater Bay Area Chief Economists Forum.
In the first half of 2024, the sales area and value of new commercial housing in China fell by 19% and 25% year-on-year respectively, according to the National Bureau of Statistics. Housing starts, a measure of new residential building, fell by 23.7% to about 380 million square meters, while, according to market research firm CRIC China, sales by the top 100 developers dropped by 39.5%.
Download our app to receive breaking news alerts and read the news on the go.
Get our weekly free Must-Read newsletter.
- RELATED
- DIGEST HUB
Digest Hub
Back
- China's real estate sector has severely declined, with new commercial housing sales area and value falling 19% and 25% respectively, housing starts decreasing by 23.7%, and top 100 developers' sales dropping by 39.5%.
- Consumption growth has slowed significantly, up only 3.7% year-on-year compared to over 8% pre-pandemic, due to declines in real estate and stock markets, and wage cuts affecting household wealth.
- Despite a record trade surplus of 3.09 trillion yuan, Lu Ting emphasizes that China must adopt short-term stimulus with structural reforms for sustainable economic recovery.
- Nomura
- Nomura is a Japanese financial services group and a global investment bank. Lu Ting, chief China economist at Nomura, highlighted the struggles of China's economy, particularly the ongoing real estate sector slowdown, its impact on GDP, fiscal revenue, and household wealth, and the need for structural reforms and short-term stimulus to address these issues.
- CRIC China
- CRIC China is a market research firm referenced in the article. It provided data indicating that sales by China's top 100 developers dropped by 39.5% in the first half of 2024, highlighting significant challenges in the real estate sector.
- Before this round of downturn：
- The real estate sector contributed to about a quarter of China’s GDP, 38% to national fiscal revenue at its peak and accounted for nearly 70% of household wealth.
- During previous rounds of economic recovery：
- The property sector usually accounted for 40% to 50% of new credit, or even more than 60% at its peak.
- In the first half of 2024：
- China’s total exports increased by 6.9% and it enjoyed a trade surplus of 3.09 trillion yuan ($426 billion), a historical high.
- In the first half of 2024：
- Housing starts, a measure of new residential building, fell by 23.7% to about 380 million square meters.
- In the first half of 2024：
- Official data showed a 3.7% year-on-year increase in total retail sales of social consumer goods.
- In the first half of 2024：
- Sales by the top 100 developers dropped by 39.5%, according to market research firm CRIC China.
- In the first half of 2024：
- The sales area and value of new commercial housing in China fell by 19% and 25% year-on-year respectively, according to the National Bureau of Statistics.
- PODCAST
- MOST POPULAR
Sign in with Google
Sign in with Facebook
Sign in with 财新