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.
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