The direct impact on bank asset quality is small, but it is denting confidence in the real estate market and badly damaging housing sales.
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China’s economy has been gradually recovering since May, after lockdowns were lifted in major cities. The real estate sector, however, remains deeply problematic.
Uncertainty around the global food supply have drawn Beijing’s attention to the challenges of feeding China’s 1.4bn population.
GDP breakdown shows very weak domestic demand, continuing to undermine so-called rebalancing, and the worst property slump on record.
China loosened several Covid restrictions last month, including cutting the inbound quarantine period to “7+3”, to boost the economy.
China’s strong current account surplus and the recent reversal in equity flow have helped the RMB outperform other currencies.
China is on track to peak its oil consumption by 2030, fueled by its transition to new energy vehicles and upgrades in the petrochemical industry.
China’s housing sales have rebounded in the past two weeks, led by tier-1 and tier-2 cities, thanks to policy support and less disruption from Covid.
The Chinese economy is recovering gradually from Covid lockdowns, with a stronger boost from external demand than domestic demand.
Prospects for consumption are dim while Covid-related disruption continues and consumption is pushed lower down the policy agenda.