Verus’ Post

An interesting chart about the Chinese real estate market - an important story when thinking about the issues sitting on the desk of the government and the challenges they face.

Housing prices in China continue to decline. More than a third of private investors in China are incurring losses on their real estate investments (Chinese have invested the majority of their savings in real estate). Earlier, reports suggested that the real estate crisis in China will hit the economy harder than in the US in 2008. #realestate #china #macro

China's real estate turmoil and tighter monetary policy in the United States pose a major challenge to South Korea's traditional growth model. The existing growth formula, which relies on real estate, household debt, and exports to China, is not working well. This is largely due to the fact that after the global financial crisis, while major advanced economies deleveraged their household debt, Korea (and China) intensified their financialization policies centered on real estate. To move towards a sustainable growth path, an orderly deleveraging of household debt is necessary, and the key is to reduce the growth rate of household debt below the growth rate of income. The resulting debt spillovers and macroeconomic contraction need to be countered by the appropriate use of fiscal space and productive diversification of capital flows. Exports should also focus on qualitative competitiveness and strengthen R&D and industrial policies.

#NewsUpdate | China's real estate investment products are tumbling, extending last year's slump as investors lose hope for a recovery in the economy and property assets such as industrial parks and logistics hubs. https://lnkd.in/dj6Rj88T #RealtyNXT #China #RealEstateInvestment #Economy #IndustrialParks #LogisticsHubs #REIT #Investors #InfrastructureAssets 

Investing in China poses significant risks due to the real estate crisis and limited government intervention options. Unlike Western countries, China's common prosperity agenda and political stability take precedence over short-term economic gains. Deflation and reduced consumer spending could impact companies operating in China, with limited prospects for government intervention. As a result, investing in Chinese companies requires caution.</div><div class="read-more"><a href="" class="more-link">Continue reading</a>https://lnkd.in/gpHhrgzc

🏗️ China's Real Estate Sector Faces a Harsh Reality In a bold statement that underscores China's commitment to market principles, Housing Minister Ni Hong declared that real estate companies facing severe insolvency must face bankruptcy or restructuring. This comes amidst a backdrop of major developers like Evergrande and Country Garden defaulting on their debts, highlighting the precarious state of China's property market. This approach starkly contrasts with the 2008 Financial Crisis, where the US government intervened to bail out banks, showcasing a surprising alignment with capitalist principles by a country often labeled as communist/socialist. It's an ironic twist that challenges perceptions of economic ideologies and their application in crisis management. China's stance not only aims to address the immediate challenges in the real estate sector but also signals a broader shift towards reducing the economy's dependence on property, focusing instead on high-end manufacturing. As the world watches, the implications of this strategy will undoubtedly resonate beyond China's borders, potentially reshaping global economic narratives. #RealEstate #China #EconomicPolicy #MarketPrinciples

Reading between China's economic lines - For only the fourth time in the past quarter-century central authorities in Beijing will issue special treasury bonds, to the tune of 1 trillion yuan, or about $139 billion, which won’t be included in the fiscal deficit. The three previous such bond issuances each followed an economic emergency—the Asian financial crisis of 1998, the global financial crisis of 2007 and the initial pandemic outbreak in 2020—speaks to the deep sense of urgency that CCP officials are feeling now.

China is trying to boost its real estate sector by taking unprecedented risks. China's real estate market is collapsing. They are also taking a significant risk. It's unlikely to end well. #finance #china #investment

Today our focus is China with Kevin Kidney, Head of Asset Allocation, looking at the People’s Bank of China and their decision to lower interest rates to encourage further borrowing from the private sector. China remains in a post property crash bust with an equivalent one trillion dollars’ worth of unsold properties, which will cause prolonged consequences for growth in an economy which is aging rapidly. Similar property bubbles in the west have historically taken 5-7 years to resolve so China is facing a big challenge and interest rate cuts will just not be enough to stimulate the economy. #Investing #China #Property