China's Economic Overview and Challenges slide image

China's Economic Overview and Challenges

Property market has been the main driver of China's economic growth but now is also a potential source of systematic risk Property market has been a key engine for economic growth China's Economic Growth Year-on-year growth 40% 30% 20% 10% 0% -10% -20% 2007 2009 2011 2013 2015 2017 2019 2021 GDP Real estate investment Yet it also overleverages the financial system and needs rectification m 27% 20% As of Q3 2021, property- related loans accounted for 27% of banking assets, not including loans by trusts and other asset companies. The urban property market is over-developed, with a vacancy rate of over 20%*. *The Standard, “China faces tricky balancing act in push for stability", 20th December, 2021 • Source: National Bureau of Statistics, PRC (data as of 17/1/2022) Property sector has been one of the main drivers in investment and overall economic growth. BEA東亞銀行 1.3 China had a fertility rate of just 1.3 children per woman in 2020, on a par with Japan and Italy. Housing demand will decline as time goes on. 6
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