China’s Housing Crisis: The Pain Will Persist Until Beijing Acts
News Analysis
China continues to suffer economic setbacks. The latest came with the news that housing sales in July plunged almost 30 percent from June. Optimists had taken heart when housing sales had picked up in May and June in response to eased COVID-19 lockdowns, but the most recent news has dashed hope for an easy recovery.
Since housing amounts to some 30 percent of China’s gross domestic product (GDP), this news raises questions about the economy’s ability to meet the government’s already reduced 5.5 percent target for real growth in 2022 or show much growth at all for that matter. It should be abundantly clear now—even to Chinese Communist Party leadership—that this crisis requires concerted action from Beijing. Yet, the Politburo, China’s top policy-making body, shows no inclination to act. This matter will not go away until it does….