{"id":211779,"date":"2025-12-30T18:17:12","date_gmt":"2025-12-30T18:17:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/211779\/"},"modified":"2025-12-30T18:17:12","modified_gmt":"2025-12-30T18:17:12","slug":"as-a-property-slump-drags-on-chinas-economy-looks-more-resilient-than-it-feels-2","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/211779\/","title":{"rendered":"As a property slump drags on, China’s economy looks more resilient than it feels"},"content":{"rendered":"

HONG KONG — By some measures, China\u2019s economy is looking resilient, with strong exports<\/a> and breakthroughs in artificial intelligence and other advanced technologies. <\/p>\n

But that\u2019s not how it feels for many ordinary Chinese, who have been enduring the strain from weak property prices<\/a> and uncertainty over their jobs and incomes.<\/p>\n

While some industries are thriving thanks to government support for technologies such as AI<\/a> and electric vehicles, owners of small businesses report tough times as their customers cut back<\/a> on spending.<\/p>\n

Some economists believe that the world\u2019s second largest economy is growing more slowly than official figures suggest, even though China may hit its official 2025 annual growth target of about 5%<\/a>. Beijing has averted a damaging full blown trade war<\/a> with Washington after President Donald Trump struck a truce with Chinese leader Xi Jinping, but many longer-term challenges remain. <\/p>\n

Business is \u201cvery tough\u201d right now as people don\u2019t have much disposable income, said billiards hall owner Xiao Feng, who lives in Beijing.<\/p>\n

\u201cIt seems the wealthy don\u2019t have the time, and the ordinary folks don\u2019t have money to spend,\u201d said Xiao. \u201cAfter deducting all costs, including rent, labor, utilities, I\u2019m just breaking even.\u201d<\/p>\n

Xiao and his wife, a nurse, have a 10-year-old son. With her stable income, she is now the household\u2019s breadwinner.<\/p>\n

\u201cBefore, I used to contribute about 100,000 yuan (about $14,250) annually to the household,\u201d said Xiao, who has cut his staff from eight to five as competition has intensified. \u201cBut I\u2019ve had no income for about six consecutive months now.\u201d<\/p>\n

Beijing-based commercial property agent Zhang Xiaoze said he used to make up to 3 million yuan (nearly $428,000) a year during the peak years of the mid-2010s. Now he brings in about 100,000 yuan annually, and the the business environment is \u201cextremely challenging,\u201d he said. <\/p>\n

\u201cDemand is weak because many companies are relocating out of Beijing,\u201d Zhang said, who is married with one child. \u201cThe fundamental issue is that people don\u2019t have money.\u201d<\/p>\n

\u201cThere are times when I must dip into my savings to support the family,\u201d he said. <\/p>\n

China’s ruling Communist Party is promoting leader Xi’s push for \u201chigh-quality growth\u201d and domestic innovation as it shifts investment and policies toward a consumption-driven<\/a> growth model and high-tech industries<\/a>. <\/p>\n

During its rapid ascent as an export manufacturing superpower, China invested heavily in infrastructure such as railways, highways and ports, industrial zones and other property development. While boosting consumer spending<\/a> and business investment are key priorities, exports remain a vital driver of employment and economic growth.<\/p>\n

In the first 11 months of this year Chinese exports amounted to a record $3.4 trillion — with growing shipments to Southeast Asia and Europe helping to offset a sharp drop to the U.S. — versus imports of $2.3 trillion.<\/p>\n

\u201cChina\u2019s economy is amidst what I call a \u2018Great Transition,\u2019 as it moves away from the growth engines that drove growth the past three decades,\u201d said Lynn Song, chief economist for Greater China at ING.<\/p>\n

As is true in the U.S., in China the AI boom has helped drive gains in share prices. But the resources that have poured into the technology sector have not translated into a direct wealth effect for most people, said Song. \u201cIt is no surprise that many feel the situation on the ground is not reflecting the relatively more optimistic growth picture,\u201d he said.<\/p>\n

The divergence between the official economic growth figures and what many Chinese people are feeling suggests China<\/a> \u2019s actual growth \u201cmay be well below\u201d what official data suggest, said Zichun Huang, China economist at Capital Economics.<\/p>\n

Recent economic data indicate growth is slowing. Retail sales increased by just 1.3% in November from a year earlier, slower than October\u2019s 2.9% growth. Fixed-asset investment, meanwhile, dropped 2.6% in the first 11 months of 2025.<\/p>\n

Disposable household income growth has been running below pre-pandemic pace in recent years, economists at HSBC said in a recent report, and \u201cincome gains from property have virtually vanished.” <\/p>\n

The International Monetary Fund<\/a> recently raised China\u2019s growth forecast from 4.8% to 5%, near the official target, and banks including Goldman Sachs raised their forecast for China\u2019s economic growth in recent months.<\/p>\n

Other estimates vary. Capital Economics forecasts growth at a 3% to 3.5% annual pace this year. The Rhodium Group, a think tank, puts it at 2.5% to 3%.<\/p>\n

Much of China\u2019s consumer and investor confidence hinges on property, the main repository for most household wealth. Housing prices have fallen 20% or more since they peaked in 2021. The massive downturn<\/a> followed a crackdown on excessive borrowing in the real estate industry that triggered a debt crisis.<\/p>\n

In the first 11 months of this year, new home sales fell 11.2% by value from a year earlier, according to China\u2019s National Bureau of Statistics. Property investments fell nearly 16% year-on-year.<\/p>\n

Xiao, the Beijing billiards hall owner, bought an apartment in the city\u2019s Tongzhou district in 2019 for more than 3 million yuan. ($428,000). It’s now worth about ($342,000).<\/p>\n

\u201cI drive a ten-year-old car and have no plans to replace it given the economic climate,\u201d Xiao said. \u201cIf my apartment hadn\u2019t depreciated so significantly, I might have already bought a new one.\u201d<\/p>\n

Xiao said he used to spend a \u201cconsiderable amount\u201d on his son\u2019s tutoring fees. “But now we\u2019ve cut that entirely and teach him ourselves instead,\u201d he added. \u201cI feel quite uncertain about the economic outlook.\u201d<\/p>\n

A Tianjin-based tutor, who only gave his surname as Zhou as he\u2019s not authorized by his company to speak to the media, said his income dipped by more than a third as more parents stopped sending their children for tutoring. <\/p>\n

\u201cBecause of the economic situation, parents are unwilling to spend money on tutoring,\u201d said Zhou. \u201cThey prefer large group classes instead of one-on-one tutoring.\u201d<\/p>\n

\u201cBusiness is much worse than before — about 50 percent worse than during the COVID period,\u201d he added. \u201cThe future looks bleak.\u201d<\/p>\n

Most forecasts are for the economy to grow more slowly in 2026 and beyond, as China’s leaders tinker with incremental policies while putting off fundamental reforms that might help boost consumer confidence. Challenges ahead center on consumption and investment, but with the housing market remaining weak, growth momentum may be slow, economists said.<\/p>\n

Excess supply in many industries, including autos, steel and consumer goods is a chronic problem, depressing prices and profits. Chinese export prices have fallen by over 20% overall since early 2022, according to HSBC. Government efforts to tame price wars have so far had \u201cminimal impact,\u201d it said.<\/p>\n

The country\u2019s growing trade surplus<\/a>, at more than $1 trillion in 2025, is also adding to trade friction, potentially triggering protectionist moves that may crimp exports.<\/p>\n

Economists such as Michael Pettis of the Carnegie Endowment for International Peace argue that a fundamental shift enabling workers to hold much more of the nation’s wealth is needed. But that so far appears to be politically untenable. <\/p>\n

With people cutting back on everything including business trips, a budget hotel owner in the northern city of Shijiazhuang was glum about the outlook. <\/p>\n

\u201cI don\u2019t see an immediate rebound in the economy,\u201d said the man, who gave only his surname, Zhai, fearing that making critical comments about the economy could get him in trouble. \u201c(I) don\u2019t have a high level of education, so switching industries is almost impossible. Other industries are also struggling.\u201d<\/p>\n

\u201cMy lease expires next May or June,” he added. \u201cIf the situation hasn\u2019t improved by then, I will shut down the hotel.\u201d<\/p>\n

____<\/p>\n

AP’s Beijing newsroom contributed to this story.<\/p>\n","protected":false},"excerpt":{"rendered":"HONG KONG — By some measures, China\u2019s economy is looking resilient, with strong exports and breakthroughs in artificial…\n","protected":false},"author":2,"featured_media":211780,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[118007,127,343,114,9513,184,122,85,911,2682,46,135,126],"class_list":{"0":"post-211779","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-118007","9":"tag-article","10":"tag-artificial-intelligence","11":"tag-business","12":"tag-economic-indicators","13":"tag-economy","14":"tag-general-news","15":"tag-il","16":"tag-information-technology","17":"tag-international-trade","18":"tag-israel","19":"tag-small-business","20":"tag-world-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/211779","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=211779"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/211779\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/211780"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=211779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=211779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=211779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}