Odd Lots Just How Bad Is the Economy Getting in China?
10 snips
Sep 5, 2022 
In this engaging discussion, Tom Orlik, Chief Economist at Bloomberg Economics and author of "China: The Bubble That Never Pops," unpacks the troubling state of China's economy. He highlights the severe impact of COVID Zero policies and the real estate crisis, with many homebuyers boycotting mortgage payments. Orlik also explores the dire effects of climate change, particularly extreme heat and drought, on energy and agriculture. With a fragile banking sector and global inflation pressures, the conversation reveals a complex and precarious economic landscape.
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China's Real Estate Dependence
- China's real estate sector accounts for 30% of GDP due to high demand and speculation.
- Limited investment options and rising incomes fueled this demand.
Pre-Sales Practice
- Real estate developers used pre-sales to fund new projects instead of completing existing ones.
- Government intervention and changing market dynamics exposed this unsustainable practice.
Government's Role in the Crisis
- The Chinese government's crackdown on risky real estate practices contributes to the current crisis.
- However, the pandemic and other macro factors also play a significant role.