The Intelligence from The Economist
Home groan: China’s housing-sector crisis
Aug 22, 2023
Don Wineland, The Economist's China business editor, delves into the deepening housing crisis in China, spotlighting the struggles of developer Country Garden and the fallout from Evergrande's collapse. He explores the economic ramifications and how ordinary citizens are impacted. Meanwhile, Guy Scriven shares his thrilling experience in a self-driving taxi in San Francisco, discussing the technology's seamless navigation and the mixed reactions to autonomous vehicles. They also touch on the worrying decline of Antarctic sea ice and its global implications.
26:59
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Quick takeaways
- The housing crisis in China poses a threat to the economy and undermines confidence in the government due to the high level of leverage in the sector.
- Self-driving taxi companies in San Francisco offer potential benefits such as improved accessibility and in-car entertainment, despite concerns about safety and job displacement.
Deep dives
China's Housing Market Crisis
China's housing market has been hit with a long-running crisis, resulting in the downfall of major housing companies like Evergrande and now Country Garden. The high levels of leverage in the sector have contributed to this crisis. Country Garden, previously considered a strong developer, missed a coupon payment, causing panic in the housing market and across China's markets. With a significant portion of the Chinese population investing in housing due to limited investment options, a housing crisis can quickly lead to a loss of faith in the economy. This crisis poses a threat not only to homebuyers but also to the government and the wider Chinese economy.
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