Monitor | Declining property investment the key to China's slowdown
Export figures are looking grim but the real reason for declining growth rate can be found in Beijing's efforts to cool the housing market
The worry of the week this week is the mainland's export performance. After the country recorded year-on-year export growth of just 2.7 per cent last month a bevy of analysts have warned that continued weakness will weigh further on already slumping economic growth.
Slower shipments are certainly a concern for exporters, and troubling news for policymakers worried about the millions of manufacturing jobs at risk if export growth falls any more.
But weaker exports are not the principal cause of the slowdown in the overall growth rate that we've seen over recent quarters.
According to official figures, net exports have not contributed positively to the economy's quarterly growth rates since the end of 2010.
So if we want to find the cause of the recent slowdown, we'll have to search elsewhere. One obvious thing to look at is residential property investment.
Back in early 2010 Beijing introduced a suite of restrictions aimed at reining in China's runaway property market. To cool down price rises running at annual rates of 30 to 40 per cent in some cities, the authorities raised minimum deposits, slapped restrictions on mortgage lending, and in some cases banned the purchase of multiple apartments.