Can China's economy reverse a sluggish 2023 in the last quarter? Here's what to watch
BEIJING — The last three months of the year are set to bring more clarity on China's economic outlook and any government support — especially for the critical real estate sector.
China's rebound this year from Covid-19 has slowed since April. Then over the summer, the property slump accelerated, despite many large cities easing restrictions for buying apartments.
«Gradually, the central government is going to loosen up on the supply side, too,» Yao Yang, dean of the National School of Development at Peking University, told reporters in a briefing Wednesday.
«Probably in half a year, we are going to see the housing market stabilize,» he said, noting regulators were previously «overshooting» in their real estate crackdown.
At its peak, China's property sector accounted for about a quarter of the economy, which means the industry's struggles have weighed on everything from consumption to local government finances.
Yao also expects the central government to allow local governments to borrow more money to pay back their long-term debt — which he said can help the economy recover fully by the middle of next year.
In 2020, Beijing tried to rein in real estate developers' high reliance on debt with new restrictions on financing. Covid restrictions dampened homebuyer appetite, drying up an important source of cash for developers since apartments are typically sold ahead of completion in China.
Developers delayed construction on projects, further worrying homebuyers. By late 2022, several real estate giants had defaulted on their debt. This summer, top leadership started to signal a new tone.
«The decline in the real estate sector was the result of the government's intentional measures to correct the bubbles in the market,» Yao
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