Cross-posted from Investing in Chinese Stocks.
The National Bureau of Statistics has a new report on urbanization out. Urbanization slowed last year and the demographic dividend died. Population is still moving from rural to urban, but the rate of increase slowed. Urbanization will continue, in part because rural fertility exceeds urban fertility, but as China urbanizes, fertility is also converging with Singapore and Hong Kong near 1. Urbanization is a demographic cannibalization strategy aimed at delivering GDP today, with the cost of reduced fertility in the long-run. If population reduction is a benefit too, then it’s the one-child policy by another name……
That won’t help property and some know it. A CPPCC says government officials need a crisis attitude in order to defend against a collapse in property prices.
CPPCC member and professor of economics at the Institute of Shanghai Academy of Social Sciences department, doctoral tutor Zhang Hongming believes that the Chinese real estate market to be the new normal “double defense” both, to have a sense of crisis and response plans. First, prevent an overheating property market again. Second, we must guard against the rapid global cooling trend and prices fell sharply. He believes that both the economy and society, whether individuals, companies or countries can not afford such a property winter.
Zhang Hongming spoke spring 2013 winter 2014, China real estate abroad rumored 2014 “collapse says.” Passed in 2014, China’s real estate performance is indeed somewhat weaker, but with the “crash say” far from.
In his view, first of all, the Chinese economy determines the new normal real estate market the new normal. The overall performance of the real estate is determined by the national economy. The speed of economic development, resulting in an increase or decrease in the demand for real estate products, then the real estate proposed increase or decrease the supply requirements. Follow this logic, the real estate market is determined by the national economy, naturally following conclusions: the coming period, China’s real estate market will show the same trend with the national economy, will remain flat new normal development.
