Only 2.0% retail sales growth for June year-to-year. Important
Big fall of property investment and home sales, I don't care
Chinese Economics Thread
- Thread starter Norfolk
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Big fall of property investment and home sales, I don't care
The surprisingly weak GDP print should be understood as the weak Chinese consumer demand finally making itself heard.
Post-pandemic, the industry pulled not only its own weight but even that of the others. But this is now no longer possible.
And weak retail sales is also reflected in very weak consumer confidence.
Why is the Chinese consumer so pessimistic whereas the industry is doing so well? I suspect we're still dealing with the fallout of the real estate crash here. It will take years to sort itself out, probably longer than many are expecting.
Very low inflation is also not helping, as it means it's often more advantageous to simply put off purchases and thus Chinese consumers are incentivised to weaken their demand.
Post-pandemic, the industry pulled not only its own weight but even that of the others. But this is now no longer possible.
And weak retail sales is also reflected in very weak consumer confidence.
Why is the Chinese consumer so pessimistic whereas the industry is doing so well? I suspect we're still dealing with the fallout of the real estate crash here. It will take years to sort itself out, probably longer than many are expecting.
Very low inflation is also not helping, as it means it's often more advantageous to simply put off purchases and thus Chinese consumers are incentivised to weaken their demand.
It's a perception effect. Consumers are puling back because their net worth is declining with the popping of the real estate bubble. If you believe your assets are losing value and that it won't get better, you will naturally spend less because you "feel" worse off financially even if the declining component is not liquid.
And regardless of the positive picture painted by the over all economy, consumer confidence is directly tied to personal financial security. People aren't financially secure when their main investments - 70% of Chinese house hold wealth is tied up in property - are dropping in value.
And regardless of the positive picture painted by the over all economy, consumer confidence is directly tied to personal financial security. People aren't financially secure when their main investments - 70% of Chinese house hold wealth is tied up in property - are dropping in value.
I also think it's about Covid. Don't forget that China didn't provide free cash to the people like the US. So that meant that people had to dig through savings and such
So now they are worried that something like that could happen again and they are over-saving lol
it is due to fucking 润人 and 殖人 propaganda. they are economic saboteurs.
After people are held hostage for nearly a year due to covid restriction, they obviously want to travel lol. And the outbound tourism is even restricted due to visa and flight issues, otherwise the outflow will be so much bigger.
Well for many people they choose between fancier purchases at home and vacation trips. They've had all the chances to make home purchases during Covid, now it's more prioritised to travel.
Because the current slowdown—while painful—is both necessary and deliberate. It's been necessary for almost 20 years now.
He said that in 2007.
But governments are slow and inertia is strong, and kicking the can is so very easy. Nobody wants to be the killjoy when everyone is happy getting richer. Which is why it's only now that serious efforts are happening to resolve longstanding problems. Everyone knew it would happen eventually, and today's the day of reckoning. Stimulus is not forthcoming because the whole point is to remove money from inefficient sectors, not add more. The falling housing prices, the folding property developers, the slow-motion real estate crash, are the point. And that's painful. Doesn't make it any less necessary though.
None of this is in any way a secret.