Winners and losers in China’s property market

CHINA ADVISORY - Report 25 Nov 2022 by Andrew Collier

China has announced a package of stimulus measures for the property market. They are a compromise between full economic support and the previous harsh restrictions on the property developers. However, many of the measures are focused on demand, while consumers are reluctant to invest in an unstable asset. Others, including easing bank loans, are not going to be successful because many banks do not want to lend to risky property developers.

Given these problems, we expect many developers to default, while local governments struggle with creative ways to generate financing for growth, including shadow banking and implicit state bank loans. This is negative for growth, the distribution of wealth, and ultimately, the future of the Xi Jinping government.

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