Chinese property – Propping up consumption
“A place to live in,” is how China’s president
Xi Jinping described residential property at the
recent party congress , negating China’s aggressive
expansionist policy , especially with its neighbours.
It wasn’t the first time he
had said as much so with such a clear tone from
the top, it is no surprise that China has been
tightening controls on real estate speculation for
over a year now. China has over developed , as a result
of pressured monetary policy to maintain
domestic order. The net effect , over risk on the
reliance of China to provide Global economic stability
beyond US , Japan & EU.
As a result, growth of property
sales turned negative late last year while property
prices softened in many cities. China , has
used material possesstions as a basis to control
its populace , and now the controls are wearing thin.
Expect 2018 and beyond to be
the year when these controls really bite, not just
on the property market but on overall
consumption that has been propped up by the
property wealth effect, especially the secondary effect
within the EU & USA that has grown to ‘love’
cheap good for quick consumption.