Beijing is in a bind over harsh Covid lockdowns, a property crisis and tensions with western trading partners
“The property sector is ailing, investments are all falling, and people are saving rather than spending,” says Hong Hao, a prominent market analyst whose social media account was censored this year after downbeat remarks about the economic outlook.
So much so, a recent politburo meeting chaired by the president, Xi Jinping, omitted any mention of a GDP goal, instead suggesting the country should “stabilise employment and prices, maintain economic operations within a reasonable range, and strive to achieve the best possible results”. Qian says China’s growth is slowing and will plateau because it has reached limits set by its fundamentals. “One cannot reduce unemployment without creating new jobs. But how can there be new jobs if existing firms don’t make more money? And many firms, like the real-estate firms and construction industry in trouble today, have been doing much worse than we thought.”
Sensing a social crisis in the making, Beijing quickly came up with measures to smooth out the tensions and aid the property sector – which accounts for 25% of the Chinese economy. Some local officials produced novel ideas, such as encouraging party members to lead the buying spree.
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