CNN Poll Shows 8 in 10 Economists Identify Housing as Biggest China Risk

A dramatic building boom helped China to develop the world’s second largest economy. But now, economists say, a runaway real estate sector poses the greatest risk to growth.

Eight out of 10 economists say the property market poses the biggest threat to the economy, according to a new survey conducted by CNNMoney.

That’s a shift from the previous three quarters, when most economists identified credit growth as the primary hazard.

“The major concern is oversupply — property construction has been growing at an unsustainable rate, with the pace of urbanization having peaked,” said Qinwei Wang of Capital Economics. “With developers’ inventories of unsold property still increasing, real estate looks set to remain a drag on the economy.”

It’s easy to see why economists are concerned. JPMorgan estimates the sector and related services make up about 20% of GDP, and property investment alone accounted for more than 15% of economic growth last year.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza