Xi faces painful gear shift as China's investment-led growth sputters

  • 📰 ChannelNewsAsia
  • ⏱ Reading Time:
  • 65 sec. here
  • 3 min. at publisher
  • 📊 Quality Score:
  • News: 29%
  • Publisher: 66%

Россия Новости Новости

Россия Последние новости,Россия Последние новости

HONG KONG/BEIJING: American businessman Brody Shores' furniture business in China grew on a model that leaned heavily on the promise of an enduring property boom and homebuyers desperate for fully furnished new apartments. Soon after launching in 2019, his company began selling directly to developers who d

HONG KONG/BEIJING: American businessman Brody Shores' furniture business in China grew on a model that leaned heavily on the promise of an enduring property boom and homebuyers desperate for fully furnished new apartments.

As Xi Jinping prepares to extend his tenure as China's leader at next week's Communist Party Congress, he faces once-in-a-generation economic challenges and decisions that will significantly shape the lives of the country's 1.4 billion people. Michael Pettis, professor of finance at Peking University in Beijing, said while many economies have followed an investment-driven development model, China's reliance on it was extreme.

That investment-consumption imbalance is deeper than it was in Japan in the 1980s, before its infamous"lost decades", and with China accumulating total debt worth almost three times GDP. China in recent months has already cut interest rates, approved infrastructure projects and given banks new quotas to fund them. To prop up the distressed property sector, many cities have reduced downpayments and eased mortgage rates.

Policy focused predominantly on supply, not demand. The government spent money on roads, railways and airports, while banks lent more to strategic, state-dominated industries than to consumers. In the property market, which now accounts for a quarter of China's economic activity, businesses took more risks and banks offered mortgages before flats were built, leading to massive oversupply.

 

Спасибо за ваш комментарий. Ваш комментарий будет опубликован после проверки
Мы обобщили эту новость, чтобы вы могли ее быстро прочитать.Если новость вам интересна, вы можете прочитать полный текст здесь Прочитайте больше:

 /  🏆 6. in RU

Россия Последние новости, Россия Последние новости