<
https://www.nytimes.com/2023/11/06/business/china-economy-property-crisis.html>
"China’s political leaders, under pressure to support the country’s fragile
recovery, are slowly steering the economy on a new course. No longer able to
rely on real estate and local debt to drive growth, they are instead investing
more heavily in manufacturing and increasing borrowing by the central
government.
For the first time since 2005, when comparable record keeping in China began,
banks controlled by the state have started a sustained reduction in real estate
lending, data released last week showed. Enormous sums are instead being
channeled to manufacturers, particularly in fast-growing industries like
electric cars and semiconductors.
There are risks to the approach. China has a chronic oversupply of factories,
well more than it needs for its domestic market. A greater emphasis on
manufacturing will probably lead to more exports, an increase that could
antagonize China’s trading partners. China’s extra lending also poses a
challenge for the West, which is trying to foster extra investment in some of
the same industries through legislation like the Biden administration’s
Inflation Reduction Act.
The shift to manufacturing loans underlines Beijing’s reluctance to bail out
China’s debt-burdened property market. Construction and housing account for
about a quarter of the economy and are now suffering from steep declines in
prices, sales and investment.
China’s investment push might stir more growth in the coming months, partly
offsetting troubles in the housing sector. But more central government
borrowing, as a replacement for local borrowing, will do little to defuse the
long-term drag on growth caused by accumulating debt.
“I don’t think there is a problem for short-term development, but we have to be
concerned about medium and long-term development,” Ding Shuang, the chief
economist for China at Standard Chartered, said at a recent forum of Chinese
economists and finance experts in Guangzhou. “It’s fair to say real estate is
not at a floor.”"
Via
Future Crunch:
<
https://futurecrunch.com/good-news-rail-education-ethiopia-conservation-congo/>
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
