With youth unemployment at record highs, growth near historic lows, a property crisis and eye-watering debt levels, Xi Jinping faces once-in-a-generation economic challenges and decisions as he prepares to extend his tenure as China's leader
Soon after launching in 2019, his company began selling directly to developers who decked out their units with furniture, a marketing trick that sold flats like hotcakes.
With youth unemployment at record highs, growth near historic lows, a property crisis and eye-watering debt levels, Xi also needs to rethink the economic model that underpinned its impressive expansion over the past four decades but is now unsustainable. Michael Pettis, professor of finance at Peking University in Beijing, said while many economies have followed an investment-driven development model, China's reliance on it was extreme.
China's blistering pace of domestic investment has built the world's largest network of high-speed railways, most of the world's 10 longest bridges, the world's busiest ports but also, by some estimates, enough empty buildings to house the entire population of France. China in recent months has already cut interest rates, approved infrastructure projects and given banks new quotas to fund them. To prop up the distressed property sector, many cities have reduced downpayments andThe National Development and Reform Commission, China's macroeconomic management agency, did not respond to requests for comment.Decades of state ownership and central planning under Mao Zedong left China rural and impoverished, with only basic manufacturing and dire infrastructure.
Policy focused predominantly on supply, not demand. The government spent money on roads, railways and airports, while banks lent more to strategic, state-dominated industries than to consumers.
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