China's economic growth target of 5% for 2023 at risk due to property crisis

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Also read: Chinese President Xi Jinping's housing crisis efforts jeopardized as Evergrande face trouble “The real estate sector will continue to be under mounting pressure" despite recent government efforts to support property, said analysts at Poseidon Partner, a Hong Kong-based investment firm. “We expect to see players who racked up debt in the past to continue to suffer." The economist survey coincides with new research from Bloomberg Economics that suggests the “around 5%" growth goal is still possible, though not a sure bet. They estimate the probability of an undershoot at 18%.

“The drag from the property slump, fragile sentiment and widespread debt stress in the corporate sector could well knock the economy onto a lower trajectory," wrote economists Chang Shu and Andrej Sokol in the Tuesday report. They project gross domestic product will expand 5.4% this year. HSBC Holdings Plc, Morgan Stanley and Citigroup Inc.

are already predicting growth of under 5% this year, with HSBC cutting its forecast this week to 4.9% from 5.3%. Data from August signaled some of the drags on the economy may be bottoming out, with the drop in exports easing and official surveys of manufacturing activity edging closer to the line above which indicates expansion. Credit also grew more than expected, potentially suggesting some stability in household demand for mortgages as authorities work to bolster the real estate market.

The upside surprise from those figures has lowered the probability that China misses its official growth target from 32% in July to less than a fifth in August, according to Bloomberg Economics. But there’s still uncertainty, especially when it comes to the housing market. A housing rally in the nation’s biggest