[The Epoch Times, January 02, 2024]Entering 2024, experts have warned that the economic crisis caused by the continuous explosion of China’s real estate industry may be the biggest “grey rhino” incident in China this year, while the opaque epidemic situation and official personnel turmoil are the “black rhinoceros” events. swan”.
The economic crisis caused by the real estate explosion may be the biggest “grey rhino”
“Gray rhino” refers to a major disaster that is obvious and inevitable.
Experts predict that the “tragic” situation of China’s real estate industry will not be optimistic in 2024. 10 large investment banks and securities firms, including Goldman Sachs, Morgan Stanley, and UBS, predict that China’s real estate industry will continue to decline in the next year. ; Goldman Sachs analysts believe that China’s fixed asset investment in real estate will experience a “double-digit” contraction in 2024, resulting in a 1 percentage point reduction in China’s gross domestic product (GDP) growth.
Wang Wangochen, an assistant researcher at the First Research Institute of Taiwan’s China Economic Research Institute, told VOA: “The biggest gray rhino next year will be nothing more than real estate in mainland China.”
Since China gradually tightened its credit policy for the real estate industry in 2020, many real estate companies that rely on high leverage ratios have begun to fall into a crisis of broken capital chains. The largest real estate leader, Evergrande, has a debt of 2.43 trillion yuan, with a debt ratio of 2.43 trillion yuan. 132.6%, and eventually became insolvent, leaving millions of “unfinished buildings” behind.
Immediately afterwards, well-known companies such as Country Garden, Bao Lei Real Estate and Zhongzhi Group also experienced debt crises one after another. China Aoyuan Real Estate Developer, headquartered in Guangzhou, also “followed” Evergrande at the end of 2023 and filed for bankruptcy in New York, USA.
Wang Guochen said that it has been three years since Evergrande’s housing market problems exploded in 2020. Even though the official has introduced some policies to loosen the housing market, the trend of falling prices in the real estate market continues. A big reason for this is the lack of credibility of builders. , so people are afraid to buy new houses.
He believes that China’s real estate industry has been in a state of contraction for three consecutive years, which has caused China’s overall economy to be weak. If the contraction continues in the fourth year, the liabilities of builders will become larger and larger, and they may go bankrupt one after another, setting off a financial crisis.
After all, the real estate industry is a pillar industry of the Chinese economy, accounting for 1/4 of China’s GDP. There are as many as 60 industries related to the real estate industry, and it also accounts for 70% of the major asset investments of Chinese households. Once the real estate industry continues to decline, its role as a key driver of economic growth in the Chinese economy will be reduced.
Louis Kuijs, chief economist of the Asia-Pacific region of Standard & Poor’s (S&P), the world’s authoritative financial analysis organization, warned that if the real estate crisis worsens, China’s GDP growth may drop to 2.9%.
The epidemic crisis and official turmoil may be a “black swan”
The “black swan” effect refers to an event that has a low probability of occurring and is unpredictable, but still occurs.
Analysts say that the epidemic may be one of China’s “black swans” in 2024, while the official storm caused by Xi Jinping’s crisis of trust may be another.
Lai Zhongqiang, convener of the Taiwan Economic Democracy Alliance think tank, said that the new coronavirus (Chinese Communist Party virus) epidemic has highlighted that China’s public health system is not sound enough, especially its opaque management methods. Even if China survives the last wave of the epidemic, it is not certain that China will still be able to survive the next wave of mutated virus strains or when a new epidemic reappears.
Chang Ping, a current affairs commentator living in Germany, said that the COVID-19 epidemic is the first time in human history that international experts were able to conduct an investigation, but were blocked by the government of a country (the Chinese Communist Party government), resulting in a failure to trace the origin of the virus.
Chang Ping said that the World Health Organization bowed before the Chinese Communist regime and was once reduced to a tool serving politics. Subsequently, the WHO repeatedly made concessions in the hope of sending experts to investigate. Even the experts who had been pre-vetted by the Chinese Communist government were unable to conduct an in-depth and thorough investigation, because neither the WHO nor the Western world, led by the United States, failed to investigate China (the CCP). ) government exerts enough pressure to solve this problem, so he will be very worried if a new epidemic breaks out in China.
On December 29, 2023, the Chinese Communist Party announced the appointment of former Navy Commander Dong Jun as the new Minister of Defense and removed nine senior generals from their qualifications as National People’s Congress representatives, including four Rocket Force military representatives.
Analysts say that what is even more opaque than epidemic management is what happened to the Chinese Communist Party’s military. From the disappearance of former Foreign Minister Qin Gang, the resignation of former Defense Minister Li Shangfu, to the purges at the top of the Rocket Force, Xi Jinping’s distrust of the officials below him, as well as some problems with the military’s loyalty and management, are all worthy of special attention this year. place.
Lai Zhongqiang said: “At present, it seems that Xi Jinping is suppressing all noises with high-pressure rule, but once the voice of dissatisfaction can no longer be suppressed, we are not sure whether this regime can really cope with the pressure from all sides. Party’s dissatisfaction and backlash.”
Editor in charge: Fang Xiao
2024-01-02 08:22:27
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