Goldman Sachs Exchanges Why China’s economy is struggling
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Sep 17, 2024 Hui Shan, the Chief China economist at Goldman Sachs Research, provides insights into the current struggles of China’s economy. She discusses the real estate downturn and its impact on consumer spending, painting a picture of shifting economic dynamics. Shan highlights the interplay between the property market and household consumption, warning of ongoing challenges. She also touches on China’s export resilience amid geopolitical tensions and the potential need for fiscal stimulus to bolster growth in a slowing landscape.
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China's Economic Shift
- China's economic narrative shifted from optimism in May to concern in September.
- Factors include weaker consumption, worse-than-expected property market, and strong yet unsustainable exports.
Housing and Consumption
- While long-term housing weakness could boost consumption, the current downturn hurts it.
- Job losses, lower incomes, and government policies like the financial crackdown negatively affect consumer spending.
Mixed Signals in Property
- China's property market shows mixed signals; some indicators near bottom, others not.
- Land sales and housing starts are down, but construction activity and prices haven't bottomed yet.