Chinese Real Estate Sector Continues to Struggle Despite Government Efforts to Boost Industry

China’s Real Estate Sector Faces Slowdown Despite Government Measures

HONG KONG (CNN) – Despite efforts by the Chinese government to boost the real estate sector, new data released by the National Bureau of Statistics (NBS) shows a significant decline in property sales and investment in the first two months of this year. This slowdown in the real estate market comes at a time when other parts of the Chinese economy are showing signs of stabilization.

According to the NBS data, new property sales totaled 1.06 trillion yuan ($147 billion) in the first two months of the year, marking a 29.3% decrease compared to the same period in 2023. Property investment also fell by 9% during this time, a faster decline than in the previous year.

Analysts from Capital Economics predict that the correction in property construction is still in its early stages, with expectations for further decline in the coming years. This could have a significant impact on economic growth in the medium-term.

However, there are some bright spots in the Chinese economy. Retail sales increased by 5.5% in January-February, with strong growth in sectors such as catering services, telecoms, and sports and entertainment. Industrial output also saw a 7% jump during the same period, driven by strong exports demand.

Despite these improvements, there are concerns about the sustainability of this growth. Economists point to the need for more policy support, particularly in stimulating consumer spending and domestic demand.

Overall, the economic outlook for China in the second quarter remains uncertain, with both challenges and opportunities on the horizon. Government initiatives to boost consumer spending and infrastructure investment will be crucial in sustaining growth in the months to come.