Chinese economy facing significant downturn, property prices dropping in tier-1 cities

From Investing.com: 2024-09-21 11:14:00

The Chinese economy is facing a significant downturn, with property prices in tier-1 cities hitting new lows not seen in 8 years. Chinese households hold over 60% of their wealth in properties, making this drop in prices a major concern. President Xi Jinping is pushing for a new economic model focused on internal consumption, leading to the deleveraging of the real estate market. China’s aggressive interest rate cuts are attempting to address this issue, but the situation remains precarious.

While the focus is on the Fed’s recent 50 bps rate cut, the real concern lies with China’s economic turmoil. The Fed’s monetary policy must be analyzed in the context of underlying growth conditions, which currently indicate that the policy is still too tight. The Fed needs to take more action to avoid falling further behind the curve.



Read more at Investing.com: China Is Imploding – And That Should Matter Just as Much as the Fed’s Pivot