China continues to suffer economic setbacks. The latest came with news that housing sales in July plunged almost 30 percent from June. Optimists had taken heart when housing sales had picked up in May and June in response to eased COVID-19 lockdowns, but the most recent news has dashed hopes for an easy recovery. Since housing amounts to some 30 percent of China’s gross domestic product (GDP), this news raises questions about the economy’s ability to meet the government’s target of 5.5. percent for real growth in 2022, or show much growth at all for that matter. It should be abundantly clear now—even to party leadership—that this crisis is serious and requires concerted action from Beijing. Yet, the Politburo, China’s top policy-making body, shows no inclination to act. This matter will not go away until it does.
Thinking About China
Opinion
China’s Housing Crisis: Beijing Needs to End Its Delays and Act
Plunge in Housing Sales Brings Home the Urgency of the Matter
A grave mound 10 meters high at a construction site in a village in Taiyuan, north China's Shanxi Province, Dec. 6. Real estate developers in China are stuck with enormous inventories and no easy way in sight to offload them and avoid losses. STR/AFP/Getty Images
Commentary
Milton Ezrati
Author
Milton Ezrati is a contributing editor at The National Interest, an affiliate of the Center for the Study of Human Capital at the University at Buffalo (SUNY), and chief economist for Vested, a New York-based communications firm. Before joining Vested, he served as chief market strategist and economist for Lord, Abbett & Co. He also writes frequently for City Journal and blogs regularly for Forbes. His latest book is "Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Will Live."
