China’s housing market has a reputation as the most-important sector in the universe (in late 2021, Goldman estimated it as the world's largest asset class at over $60 trillion)
So its continued slump naturally raises concerns among officials, even those beyond China’s borders. The International Monetary Fund, for instance, this week painted a bleak picture of how China’s housing slump may morph into a banking crisis. In one scenario, 15% of small banks may go under.
Such a scenario remains a left-tail risk, but it underscores what’s at stake as President Xi Jinping attempts to keep the economy afloat.
Poster Comment:
China will not survive the corruption, mismanagement and the Grand Solar Minimum.