|
China’s once-booming property market is in crisis. After funding to developers shrank in recent years, some builders have been forced to put residential projects on hold. Meanwhile, homebuyers – many of whom already paid for unfinished properties under China’s commonly used presale method – have responded by refusing to keep paying their mortgages.
While it seems pretty reasonable to refuse to make repayments on a half-built house, the economic stakes are climbing for China’s property sector. These mortgage strikes have reportedly spread and now cover as much as US$370 billion (£312 billion) in home loans.
The crisis, coupled with China’s zero-COVID-19 policy, is threatening growth in the world’s second-largest economy and forcing policymakers to cut interest rates, explains Zhirong Ou, an economist at Cardiff University. He describes the origins of the crisis and how its effects might be felt beyond China’s borders.
|
Quote of the week 💬
|
-
“With so many pressures driving prices up in the coming years, the overall likelihood is that inflation will remain stubbornly above central banks’ mandates of about 2%. This will have repercussions for consumption, profits, insolvencies and the stock market – not to mention economic growth overall.”
– Alexander Tziamalis and Yuan Wang, economists at Sheffield Hallam University, from their story Inflation: why it’s very unlikely to get back below 2% for years to come
|
|
Economy
|
-
Paul Allin, Imperial College London; Diane Coyle, University of Cambridge; Tim Jackson, University of Surrey
Amid the global threats posed by climate change, spiralling energy costs, insecure employment and widening inequality, the need to rethink our notion of progress is now an urgent priority.
-
Ashley Jackson, King's College London
The group was arguably more effective – and less corrupt – at collecting taxes than the former government.
|
|
Workers
|
-
Peter Dreier, Occidental College
Inspired by real events, the films tackle issues of race, gender and class in ways that will resonate with many of today’s viewers.
|
|
Energy
|
-
Daniel Cohan, Rice University
To put the $370 billion in subsidies to work, the US needs to build new infrastructure and manage a lot of regulatory hurdles.
|
|
Tourism
|
-
Timothy Welch, University of Auckland
Cruise liners are back and demand is reportedly strong. But given their environmental impact and relatively low economic benefit, how sustainable is this kind of tourism?
|
|
