The Real Story China’s economy: How worried should we be?
Feb 2, 2024
Discussion on the concerns surrounding China's economy, the impact of Evergrande's liquidation, the role of property in driving China's middle class growth, the lack of productivity growth, crackdowns on corruption in the tech sector, and China's transition and its impact on the global economy.
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China's Post-2008 Economic Shift
- China's response to the 2008 financial crisis involved increased state control and investment.
- This led to diminishing returns and slower structural growth, posing a threat to the financial system.
Qingdao Property Market and Consumer Spending
- In Qingdao, property values are declining due to oversupply and decreased demand.
- Consumers are cautious with spending due to economic uncertainty, opting for cheaper entertainment.
Property as a Savings Device
- Property is the primary savings vehicle for the Chinese middle class due to limited investment options.
- Financial markets are new, uncertain, and offer low interest rates, making property a preferred asset.