China has long used its property sector as a wealth building tool. Now the shakiness of the sector casts doubts over the country’s future.
Even after signs of recovery earlier this year, China’s massive property sector is still struggling to turn around.
Following a crackdown on debt levels in August 2020, Beijing has eased its pressure on real estate developers in the last year. Moody’s estimates that the property sector accounts for more than a quarter of China’s economy.
This is amid lingering concerns over the future of one of the country’s largest property developers, Evergrande Group.
The Chinese government decided roughly four years ago to modernise its economy, said Andrew Sullivan, founder and writer at Asian Market Sense, by moving capital out of the property sector and moving it into high-value manufacturing, he added.
However, it is facing hurdles on the path to achieving that.
“China is also being hamstrung by the fact the Americans won’t let the most recent technology go into China,” Sullivan said.
