China’s economy is at a “tipping point” and the property sector will determine how it lands, Credit Agricole warns.
“We are at a tipping point: either prices, sales and investment in real estate gradually recover as a result of the recent easing of administrative curbs, in which case the economy will rebound in the second half, or the real estate downturn will continue, causing a further slowdown in overall growth and threatening a crisis,” Dariusz Kowalczyk, senior economist/strategist, Asia ex-Japan wrote in a report.
A housing market downturn would have widespread consequences because the real estate sector accounts for over 15 percent of China’s economic output and supports some 40 other industries.
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