China’s economy is struggling

It’s hard to overstate the importance of the property market China. The industry accounts for as much as 30% of the country’s economic activity, and more than two-thirds of household wealth is tied up in real estate.

It’s hard to overstate the importance of the property market China. The industry accounts for as much as 30% of the country’s economic activity, and more than two-thirds of household wealth is tied up in real estate.

But nearly three years of “zero Covid” restrictions sapped China’s economic growth, and consumers have been reluctant to buy new homes in the face of higher unemployment and falling property values.

After a brief surge in activity earlier this year, China’s economic engines have been sputtering. Consumer prices last month fell for the first time in more than two years; youth unemployment has been rising so fast, Chinese authorities simply didn’t release the July data. Retail sales, export demand and factory production are all down.

It’s unlikely. While Beijing has made some efforts to help jumpstart demand for housing and free up cash for developers, the days of big, state-funded bailouts for bloated industries appear to be over.

As President Xi Jinping said in a recent speech: “We must maintain historic patience and insist on making steady, step-by-step progress.”