China's Economic Overview and Challenges
Will China reverse its property market restrictions?
Previous attempts to rein in the property
market were unsuccessful
Property prices and money supply
...but this time, the risk of inaction is
very high
China's Debt to GDP Ratio (%)
Year-on-year change
30%
20%
10%
0%
-10%
2007
2009
2011
2013
2015
2017
Property Price
-M2
350%
42%
300%
54%
250%
36%
200%
17%
39%
150%
17%
100%
102%
146%
224%
50%
0%
2005
2015
2020
■Corporate
■Household
■Government
•
•
Sources: National Bureau of Statistics; BEA Economic Research, data as of 31/1/2018
In 2008 and 2014, when the property market underwent
downturns, economic growth swiftly lost steam.
⚫ The government promptly reversed course and pumped in
liquidity to save the economy.
•
Source: Bloomberg, data as of 11/1/2022
⚫ The aftermath brought soaring debt levels.
China's debt to GDP level continued to rise and reached 323%
by end-2020.
Therefore, general market expectation is that China will not
reverse its policy direction.
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