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ASR in FT Unhedged: ‘The big China tail risk’

25th OCT. 2023

In a recent FT Unhedged article, Robert Armstrong and Ethan Wu discuss China’s economy, focusing on how its property sector remains in crisis, but its business cycle seems to have stabilised. 

Adam Wolfe, Emerging Markets economist at Absolute Strategy Research, estimates in a recent note that authorities need to raise annual property sales by about 15 per cent to stabilise the sector. That would address what he sees as the underlying problem: property sales have fallen too far, too fast. Even a modest improvement in sales would let developers unload inventories and continue servicing debts, limiting losses to the banking sector. Wolfe gives the example of the all-but-defaulted Country Garden, which managed to survive the first sales plunge, but not the second”.

  • To read FT’s article in full, please see: HERE (subscription may be required)

  • ASR clients can read Adam’s related report on: The end of China’s land finance era

  • If you are interested in a free trial of our award-winning research, please see: HERE

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