China Economic News

[Luke]

China's economy is much more exposed to the housing market than west economies are.
While the common american invests his savings mostly in stocks (and europeans invest their savings mostly in governmental bonds), the common chinese invests his savings mostly in real estate (well, buildings, since the land belongs to the government).

for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising. However, unlike the US where the stock market is the ultimate barometer of the confidence boosting "wealth effect", in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US, with the remainder invested financial assets.

How long China will be able to avoid a sharp price decline remains to be seen, but in the meantime another problem faces China's housing market: in addition to being the primary source of household net worth - and therefore stable and growing consumption - it has also been a key driver behind China's economic growth, with infrastructure spending and capital investment long among the biggest components of the country's goalseeked GDP.

https://www.zerohedge.com/news/2018-11-1...-are-empty









(Apologize for not being able to shrink the images)