Mikkel Rosenvold
9 weeks ago

Analyst: No way back for this Chinese sector

China is on the move again - but this sector is holding its' own consumer class back
Empty apartment house high rise building construction background
Roman_studio / Shutterstock.com

With China looking for a 5% GDP growth in 2024, there is still much concern regarding the country's real estate sector, analyst Elias Lisberg of Steno Research concludes.

The leading Chinese Li Keqiang index has surprised to the positive side in recent postings, but the Chinese private investors and consumers remain tightly wrapped up in Real Estate debt.

This leads to many Chinese families lacking the liquidity to carry out major investments in their home or their life, which is holding back Chinese growth and domestic manufacturing demand.

Meanwhile, markets are crowding to get in on the current Chinese bull case. Many expect positive trends from the US stock markets and manufacturing to spill over to the still largely export-driven Chinese economy. In that case, China could be an interesting investment option.

Elias Lisberg of Steno Research specifies: "Asian FX broadly looks cheap versus the cycle still and KRW (and Kospi) is an obvious directional vehicle, if you are slightly less esoteric of choice. Jay Powell and his ilk at least played ball with this reflation view for now!"

The Chinese real estate boom, spanning from around 2000 to 2020, represents a significant period of economic expansion and transformation within China, profoundly impacting its urban landscape, economy, and global investment flows.

This era was characterized by rapid urbanization, with millions moving from rural areas to cities, fueling an unprecedented demand for housing and commercial spaces. The government's policies, including land lease reforms and the encouragement of foreign investment, played pivotal roles in driving this boom.

Developers, often state-backed, embarked on massive construction projects, leading to the rise of new cities and the expansion of existing ones at a scale and pace rarely seen elsewhere. Real estate became a crucial component of China's GDP growth, attracting domestic and international investors alike.

However, this period also saw the emergence of challenges, including speculative bubbles, soaring debt levels among developers, and concerns over sustainable development and housing affordability. The boom has left a lasting imprint on China's economic landscape, with ongoing implications for its urban development strategy and financial stability.

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

2 hours ago US Market Open: May 28, 2024 - Mixed Signals Amid Sector Divergence Daily update from the US market open.
2 hours ago The Western World’s Financial Leaders Met - Here are 7 Central Highlights Discover how the G7's latest meeting addressed global economic challenges, AI integration, and sustainable development.
7 hours ago Chocolate Trade Tiff: EU Fines Oreo and Toblerone Parent for Anticompetitive Practices EU slaps €337.5 million fine on Oreo and Toblerone maker for stifling trade.
7 hours ago Europe Market Open: May 28, 2024 - Mixed Performance Across European Markets Daily update from the European market open.
22 hours ago Dogecoin Dog Has Passed Away Farewell to Kabosu: The Shiba Inu behind the iconic ‘Doge’-meme and Dogecoin
23 hours ago Israeli Airstrike Hits Rafah Tent Camp Israeli airstrike on Rafah camp kills dozens, raising international alarm.
23 hours ago Meta and Call of Duty Maker Sued by Families of School Shooting Victims Families of the 2022 Uvalde school shooting victims file lawsuits against major corporations and officials, claiming they contributed to the tragedy.
1 day ago Walmart and Capital One Call It Quits on Partnership Walmart and Capital One announce the end of their six-year card partnership amidst legal disputes.
1 day ago US Market Open - May 27, 2024: Wall Street Wavers but Nasdaq Soars Daily update from the US market open.