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Property to play ‘diminished role’ in China’s growth, analysts say, as investment in sector falls for first time since 1999
- Property investment dropped 10 per cent to 13.29 trillion yuan (US$1.98 trillion) in China last year, according to the National Bureau of Statistics
- ‘Starting from 2023, the property sector will play a more diminished role in fuelling broader Chinese economic growth,’ says The Economist Intelligence Unit
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Elise Makin Beijing
Property investment dropped 10 per cent to 13.29 trillion yuan (US$1.98 trillion) in China last year, data from the National Bureau of Statistics (NBS) shows, illustrating the extent of the slowdown in a sector that had been driving the world’s second-largest economy.
It represents a swing from 4.4 per cent growth in 2021, and is the first time property investment in China has recorded a decline since 1999.
“Starting from 2023, the property sector will play a more diminished role in fuelling broader Chinese economic growth, particularly when benchmarked against trends evident over the past decade,” analysts from The Economist Intelligence Unit (EIU) wrote in a report on Wednesday.
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The two-digit decline shows “a state of deterioration” that the government is trying to address, said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institute.
“Beijing has the clear [intention] to improve property investment with its recently-announced 21-point plan to optimise developers’ balance sheets,” he said, adding that the plan will improve developers’ financial status and investment expectations.
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The 21-point plan revealed on January 13 aims to aid embattled developers with 450 billion yuan ($67 billion) in financing and debt extensions.
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