China’s Growth decouples from Credit, with Global Implications

Beijing has tried to rein in the property market since 2017, concerned that the sector diverts resources away from more productive uses and creates financial risks.  In response, China’s real estate giants have sharply increased their reliance on pre-sales of apartments.

“The link between credit growth and housing starts had already broken,” said Adam Wolfe, China economist at Absolute Strategy Research. “That means the most credit-intensive sector in the economy is less sensitive to the credit cycle.”

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