China Is Suffering!
China’s property crisis hasn’t gone away: it is getting worse
The Covid-19 pandemic caused the closure of many manufacturing and shipping facilities, disrupting supplies beginning in the early 2020s. Citizens were forced to stay indoors due to the Zero Covid policy, affecting jobs and income. At least 20 cities, accounting for 10% of China's GDP, were under lockdown until August 2022.
The housing industry accounts for one-quarter of Chinese GDP. The failure of China's second-largest housing firm, Evergrande Group, to meet its offshore debt obligations triggered the housing crisis.
Developers abandoned half-finished buildings, founders sold their stakes and left the groups, forcing homebuyers to default on their mortgage payments. Housing loan defaults may cause a banking crisis because banks lent $7.5 trillion, or one-quarter of all bank loans, to housing.
Ahead of the Chinese Communist Party's 20th congress, where the country's president, Xi Jinping, is expected to secure a third term as party leader, an already serious problem is becoming even worse.
Property accounts for more than two-thirds of urban household wealth, and the industry accounts for one-fifth of GDP. The housing market is collapsing, dragging the economy down and even causing minor outbreaks of social unrest.