China’s Economy Slumps amid Zero Covid, Real Estate Plunges (again), Capital Flight Continues

Real Estate
#China #ChinaEconomy #Evergrande

China’s Economy continued to slide in April, with real estates sales seeing their worse plunge since 2006 and major bond selloffs across China’s financial sector. Though the People’s Bank of China has lowered mortgage rates, most are saying a rate-decrease across the board is what is needed.

China’s economic data for April was dismal, due in large part to its ‘Zero Covid’ strategy, with major declines in output, retail sales and a 6.1% unemployment rate.

This coincided with a continued plunge of China’s real estate market, which fell at its sharpest pace since 2006. With the sector besieged by defaults from Evergrande, Sunac, Kaisa, etc, continued slumps in the housing market will on further impede China’s economic recovery.

With the Federal Reserve raising interest rates China is undergoing a serious case of capital flight. As a result, Beijing as stopped the publication of foreign debt trades.

LINKS:

Making Sense of China’s Economy:

China Cuts Mortgage Rates to Counter Collapse in Home Sales:

https://www.bloomberg.com/news/articles/2022-05-15/china-cuts-mortgage-rate-floor-for-first-time-homebuyers

China’s economic data disappoint in April as Covid controls weigh:

https://www.cnbc.com/2022/05/16/china-economy-covid-lockdowns-weigh-on-retail-industrial-production-data.html

China’s property down cycle worsened by lockdowns:

China’s property down cycle worsened by lockdowns

China Stops Reporting Bond Trades by Foreigners After Selloff:

https://www.bloomberg.com/news/articles/2022-05-17/china-stops-reporting-bond-trades-by-foreigners-after-selloff

China’s April new home prices see slower gains, private survey shows:

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https://www.reuters.com/business/chinas-april-new-home-prices-see-slower-gains-private-survey-2022-05-01/

Canadian inflation rises to 6.8%: What you need to know:

https://financialpost.com/news/economy/canadian-inflation-rate-rises-to-6-8-beating-expectations

Coronavirus: economic toll of China’s latest outbreak ‘10 times more severe’ than Wuhan in 2020:

https://www.scmp.com/economy/china-economy/article/3177190/coronavirus-economic-toll-chinas-latest-outbreak-10-times

As China strikes positive tone on economy, experts play down short-term impact of policy support:

https://www.scmp.com/economy/china-economy/article/3178223/china-strikes-positive-tone-economy-experts-play-down-short

Goldman Sachs cuts its China GDP forecast to 4% on Covid controls:

https://www.cnbc.com/2022/05/18/goldman-sachs-cuts-its-china-gdp-forecast-on-covid-controls.html

China Signals More Policy Support With 5.5% Growth Target:

https://www.bloomberg.com/news/articles/2022-03-05/china-sets-lowest-gdp-growth-target-in-more-than-three-decades

China Keeps Key Interest Rate Unchanged Despite Sharp Economic Slowdown:

https://www.bloomberg.com/news/articles/2022-05-16/china-keeps-key-interest-rate-unchanged-amid-yuan-pressure

China Home Prices Drop for Eighth Month During Lockdowns:

https://www.bnnbloomberg.ca/china-home-prices-drop-for-eighth-month-during-lockdowns-1.1767388

A $100 Billion Comedown: Soaring Defaults Shrink Asia’s Junk-Bond Market:

https://www.wsj.com/articles/a-100-billion-comedown-soaring-defaults-shrink-asias-junk-bond-market-11652693402

China Cuts Mortgage Rates to Counter Collapse in Home Sales:

https://www.bloomberg.com/news/articles/2022-05-15/china-cuts-mortgage-rate-floor-for-first-time-homebuyers

China just saw a record bond sell-off. Now its main trading platform isn’t publishing foreign debt trades, report says:

https://finance.yahoo.com/news/china-just-saw-record-bond-172811402.html

Mark Mitchell – Mortgage Broker London Ontario
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