The Daily China’s Economic Rebound Hits a Wall
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Jul 17, 2023 Daisuke Wakabayashi, an Asia business correspondent for The New York Times, delves into the unexpected stagnation of China's economy after the lifting of lockdowns. He discusses alarming signs of slowdown, including diminishing foreign direct investment and rising youth unemployment. The podcast highlights the real estate market's struggles, with vacant properties symbolizing deeper economic issues. Wakabayashi also addresses the shifting perceptions of foreign companies regarding investment in China, amid escalating geopolitical tensions.
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China's Economic Slowdown
- China's economy, once a galloping stallion of growth, is now sputtering.
- After an initial post-COVID blip, growth hasn't rebounded as expected, with GDP projections now around 5%, significantly lower than previous years.
Real Estate Crash and Overbuilding
- A major factor is the real estate crash, with real estate accounting for a quarter of China's economic activity.
- Local governments rely heavily on land sales for revenue, leading to overbuilding and a property bubble, exemplified by Nanchang's high vacancy rates.
Declining Property Sales
- New home sales in China dropped by about a quarter from the previous year.
- Major property developers reported a 28% sales decline in June, hitting smaller cities particularly hard.