1/7
Good Al Jazeera piece on the Chinese property market with lots of CBB data: "Bank credit is being rolled out to property firms at a higher level than in any period during the second or third quarters, according to...
aje.io/gk8934 via @AJEnglish
Good Al Jazeera piece on the Chinese property market with lots of CBB data: "Bank credit is being rolled out to property firms at a higher level than in any period during the second or third quarters, according to...
aje.io/gk8934 via @AJEnglish
2/7
data collected by China Beige Book International, with mortgage lending in October increasing to 200 billion yuan from 150 billion yuan the previous month."
data collected by China Beige Book International, with mortgage lending in October increasing to 200 billion yuan from 150 billion yuan the previous month."
3/7
This shouldn't surprise. There was no way Beijing could rein in credit growth without a much sharper fall in GDP growth than they were politically able to accept, so easing was inevitable, and is likely to continue into next year.
This shouldn't surprise. There was no way Beijing could rein in credit growth without a much sharper fall in GDP growth than they were politically able to accept, so easing was inevitable, and is likely to continue into next year.
4/7
What worries me is the way many analysts see improvement in the sector when in fact there will only have been a temporary reduction in the pace at which things get worse.
What worries me is the way many analysts see improvement in the sector when in fact there will only have been a temporary reduction in the pace at which things get worse.
5/7
For example one analyst is cited as saying “Regulators likely believe that once the temporary correction blows over, the sector will be healthier than before, which is precisely what they have been working towards for years.”
For example one analyst is cited as saying “Regulators likely believe that once the temporary correction blows over, the sector will be healthier than before, which is precisely what they have been working towards for years.”
6/7
They have indeed been working towards this for years, but there is a reason they haven't been able to achieve it. For the sector to be healthier than before requires a much sharper contraction in activity, and the writing down of a lot more debt, but neither is in the cards.
They have indeed been working towards this for years, but there is a reason they haven't been able to achieve it. For the sector to be healthier than before requires a much sharper contraction in activity, and the writing down of a lot more debt, but neither is in the cards.
7/7
Obviously Beijing does not want a painful and chaotic adjustment, and rightly so, but until it dramatically restructures the growth model and permits much lower growth rates, conditions are not improving and the long-term cost of adjustment will continue to rise.
Obviously Beijing does not want a painful and chaotic adjustment, and rightly so, but until it dramatically restructures the growth model and permits much lower growth rates, conditions are not improving and the long-term cost of adjustment will continue to rise.
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