The Individuals’s Republic of China posted its GDP figures for the 2023 12 months this morning, during which the nation confirmed 5.2 p.c GDP progress for the complete 12 months.

This is similar determine additionally given by the coutnry’s premier, Li Qiang, on the World Financial Discussion board at present being held in Davos.

This proportion is up considerably from 2022’s progress of three p.c, solely marginally behind market expectations of round 5.4 p.c, in keeping with the Worldwide Financial Fund (IMF).

Lengthy-term risks

Nevertheless, longer-term headwinds stay for the financial system, in keeping with Professor Eswar Prasad, in a publication for the IMF:

There are considerations that China’s financial system is headed for a crash much like these skilled by different high-flying Asian economies… actual property funding has turn into a bulwark of the financial system, serving to to maintain progress on a fair keel when different sectors floundered. Native authorities officers are desirous to promote land to builders, boosting public revenues and enabling a spread of presidency expenditures. So, a fall in actual property costs—or the emergence of different elements that restrain actual property exercise—might have knock-on results throughout different sectors, native authorities funds, and even family wealth.”

Bother at residence

In truth, China’s Nationwide Bureau of Statistics additionally posted its year-on-year Home Worth Index for 2023 this morning. And so they had been regarding.

The information on China’s home costs confirmed that property funding fell greater than 0.40 p.c month-on-month in December – even additional than the already steep 3.7 p.c drop skilled in November 2023.

This represented the largest month-to-month drop in housing costs in a number of years for the nation. It additionally meant that, as soon as once more, actual property costs fell by greater than 9 p.c for the second 12 months in a row, as that they had in 2022 after they initially raised alarm bells for the Chinese language financial system.

Learn extra: China releases document new yuan loans

What historical past tells us about at present’s figures

Because the economists amongst us will know, the 2008 international monetary disaster – which introduced America to its knees, and the world’s financial system together with it – was preceded by a steep drop in home costs after a years-long actual property increase, largely inspired by the federal government.

Many have drawn the comparability, earlier than, between America then and China now. The query is: do at present’s figures show them proper?

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