- More loans for real estate again
- Lukashenko fraternizes with Xi
- German solar dependence remains
- Difficult working environment for journalists
- Quarantine obligation before NPC
- Fighter jets heading for Taiwan again
- Opinion by economist Stephen Roach
To get the out-of-control housing market back under control, China’s leadership has cracked down in recent years. The bankruptcy of the heavily indebted construction company Evergrande has served as a cautionary tale for the over-indebtedness of an entire industry.
Suddenly, however, high debts no longer seem so bad in Beijing – and if the desired growth could be achieved, old resolutions are quickly thrown overboard.
At the People’s Congress starting Sunday, Li Keqiang will announce another stimulus, Felix Lee predicts in his Feature on the economy and investment. In other words, the CP will fall back into old habits and abandon discipline for growth. At least in the short term, this will brighten the economic picture.
The Belarusian president’s visit to China was also about optics. Depending on the perspective, however, the visit produces very different images for the observer: The EU looks skeptically at Xi closing ranks with Lukashenko, who is loyal to Putin. The meeting of the dictators seems downright threatening to them.
Meanwhile, Beijing beams with joy due to praise for the 12-point plan presented last week to settle the war in Ukraine, as Joern Petring reports. And Lukashenko himself wants to use the visit primarily to boost trade with China.
Rekindled love for concrete gold
Just a year ago, the Chinese leadership had warned developers and investors: “No more excesses.” State and Party leader Xi Jinping himself reprimanded them: “Houses are for living, not for speculating.” But there is no sign of the supposed turnaround toward moderation in the real estate market. The government is falling back into old patterns and reigniting the spark in the housing market.
The National People’s Congress, the key economic policy event of the year, will now start on Sunday. Outgoing Premier Li Keqiang will announce a growth target for 2023 and the priorities for economic management. By then, there won’t be much left of the warnings to the construction industry other than familiar phrases. It becomes apparent that the communist leadership will fall back into old habits in order to create growth – and above all, will again focus on promoting the real estate sector.
Permanent real estate market crisis
Xi’s warnings were justified. For years, China has been slipping from one real estate crisis to the next. At times, housing prices exploded as investors drove them up. Then there were spectacular bankruptcies of construction companies. In particular, the insolvency of market leader Evergrande last year caused a real tremor. The real estate giant had run into the red with the equivalent of €300 billion from the construction and speculation of entire satellite cities and had thus incurred more debt than any other company in the world.
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