China Property cycle critical
Benefciaries of China’s consumption boom
should therefore pay attention to the development
of China’s property cycle.
With the continued
policy tightening in this sector, growth of
property sales turned negative late last year while
property prices softened in many cities.
The consumption boom for luxury goods may
moderate in the first half of 2018 and the
government may loosen policies in the property
sector by midyear to turn the cycle up in the
second half.
The sustainability of the consumption
boom in China hinges on the sustainability of
property prices. As President Xi has indicated,
he aims to design a mechanism that can make
the property sector sustainable in the long
term. The effectiveness of such a mechanism
will have a signifcant impact on China and the
global economy.
EU Forecast
euf:b18:93/nws-01