China’s red-hot property market is cooling, threatening the pace at which the government can push through reform of its financial markets and the country’s unwieldy state-owned enterprises.
Property matters because housing sales drive construction, a significant chunk of China’s industrial sector. A real estate slowdown does not augur well for economic growth GaveKal predicted China’s annual growth could drop below 7% by the end of the year.
The research boutique questioned whether reforms will continue apace as the state needs a backdrop of steady economic growth to push through change, if only to avoid a groundswell of protest.
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