China’s property market slump and weak demand highlight fragile economic recovery
- China’s economy faces weak demand and fallout from a property market downturn at home
- Relying on infrastructure investment alone is not enough to bolster the economy, some analysts say
An unexpected contraction in China’s factory activity in July has highlighted the stubborn headwinds facing the world’s No 2 economy, a situation that may demand more active fiscal measures and support for the ailing property sector, according to analysts.
“The fastest period of recovery after the economic reopening is close to an end, with insufficient demand becoming a major constraint,” China Minsheng Bank said in a note on Sunday.
The private bank said the economy faced twin threats: weak demand overseas, with developed economies slipping into recession; while consumption and the real estate market were sluggish at home.
Simply relying on infrastructure investment was not enough to bolster the economy and more policy support was needed, the bank said.