China’s property crisis has regional knock-on effects, Asean body says
- Asean office revises growth forecast for China as property market slump continues to drag on broader economy
- Concerns about China’s prospects can be applied to region, as deceleration also affects trade, tourism and investment
A regional macroeconomic surveillance body predicted on Wednesday that China’s economy will grow at a rate lower than expected three months ago, and warned its property crisis is spilling into other parts of Asia.
Growth in the world’s second-largest economy should reach 5 per cent, below a July forecast of 5.5 per cent, the Singapore-based ASEAN+3 Macroeconomic Research Office said. The office covers 10 major Southeast Asian countries plus China, Japan and South Korea.
The property crisis, China’s chief growth obstacle, worsened in the second quarter, the body’s chief economist Hoe Ee Khor said at a news conference.
“It’s a real balance sheet problem and there needs to be a real work out between the developers and creditors,” Khor said.
China’s US$18.1 trillion GDP grew 5.5 per cent in the first half of 2023 and 3 per cent last year.
Beyond the real estate sector, manufacturing investment is holding up and consumer spending is starting to get back on track
