{"id":75591,"date":"2022-01-15T07:53:54","date_gmt":"2022-01-15T04:53:54","guid":{"rendered":"https:\/\/www.capitalfm.co.ke\/business\/?p=75591"},"modified":"2022-01-15T07:58:59","modified_gmt":"2022-01-15T04:58:59","slug":"chinas-economy-grew-8-in-2021-but-property-virus-threats-loom-afp-poll","status":"publish","type":"post","link":"https:\/\/www.capitalfm.co.ke\/business\/2022\/01\/chinas-economy-grew-8-in-2021-but-property-virus-threats-loom-afp-poll\/","title":{"rendered":"China&#8217;s economy grew 8% in 2021 but property, virus threats loom: AFP poll"},"content":{"rendered":"<p class=\"header\"><strong><span class=\"city\">Beijing<\/span>,\u00a0<span class=\"country\">China, Jan 15 &#8211;<\/span>China&#8217;s economy expanded at its fastest pace for 10 years in 2021, according to an AFP poll of analysts, but its strong recovery from the Covid-19 pandemic is threatened by Omicron and a property sector slowdown.<\/strong><\/p>\n<p>The eight percent growth would be well above the government&#8217;s target of more than six percent, and comes on the back of a strong start to the year as a &#8220;zero-Covid&#8221; policy allowed the country to lead the global economic recovery.<\/p>\n<p>China&#8217;s exports surged nearly 30 percent last year on solid global demand as countries reopened from pandemic lockdowns, boosting its stuttering economy.<\/p>\n<p>But the country&#8217;s recovery in the second half of 2021 was hobbled by a series of outbreaks &#8212; with officials reimposing strict containment measures &#8212; as well as power outages caused by an emissions-reduction drive, supply chain problems and surging energy costs.<\/p>\n<p>While the forecast marks a healthy annual tick &#8212; up from 2.3 percent in 2020 &#8212; those issues put a dampener on factory activity and led to businesses shuttering.<\/p>\n<p>They were compounded by a crackdown on debt in the property sector, which accounts for a huge part of the economy.<\/p>\n<p>&#8220;Key factors&#8230; were the impact of power shortages, the residential construction sector slowdown and moderating retail sales,&#8221; said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit.<\/p>\n<p>The analysts tipped growth of just 3.5 percent on-year for the fourth quarter, down from 4.9 percent the previous three months and 7.9 percent from April-June.<\/p>\n<p>And headwinds from the construction sector slowdown, as well as the impact of Covid measures on consumer spending, will likely pose a &#8220;significant drag&#8221; on growth this year, Biswas added.<\/p>\n<p>Beijing has been on high alert as it prepares to host the Winter Olympics next month, with its zero-Covid policy powering lockdowns, border restrictions and lengthy quarantines.<\/p>\n<p>&#8220;The current coronavirus resurgence presents large downside risks to China&#8217;s economic recovery&#8230; amid the government&#8217;s zero-tolerance approach,&#8221; said ANZ Research&#8217;s chief economist for Greater China Raymond Yeung.<\/p>\n<p>&nbsp;<\/p>\n<h2>&#8211; Delays and backlogs &#8211;<\/h2>\n<p>&nbsp;<\/p>\n<p>Yeung noted that Ningbo port, the world&#8217;s third-busiest, faced disruptions as cases led to truck entry restrictions, suspended container freight operations and roadblocks.<\/p>\n<p>&#8220;These delays and backlogs could exacerbate the inflation in shipping costs as well as exert pressure on export volumes,&#8221; he told AFP.<\/p>\n<p>Another major port city &#8212; Tianjin &#8212; was hit by an Omicron cluster in January, the first time the virus strain was found in the community in China.<\/p>\n<p>Analysts expect that China will not ease up on its policy until after the Games conclude.<\/p>\n<p>Stay-at-home orders in industrial hub Xi&#8217;an likely disrupted manufacturing activities too, said Citibank, with the city of 13 million placed under a harsh lockdown in December.<\/p>\n<p>Uncertainties surrounding the property sector have also accelerated cooling in fixed-asset investment, said DBS Bank economists, adding that &#8220;strain will linger in the face of mounting financial stress&#8221;.<\/p>\n<p>Already, two-thirds of the top 30 property firms by sales have breached one of &#8220;three red lines&#8221; set by regulators, said DBS analysts Nathan Chow and Eugene Leow in a recent report, referring to different debt ratios aimed at curbing leverage.<\/p>\n<p>The clampdown that started in late 2020 has dealt a severe blow as developers &#8212; most prominently Evergrande &#8212; plunged into liquidity crises, sparking investor and homebuyer concerns.<\/p>\n<p>&#8220;Reports about developers&#8217; heightened liquidity issues and building or delivery delays will only sap confidence further,&#8221; the DBS analysts said.<\/p>\n<p>This year, authorities have hit some of the country&#8217;s biggest companies with new restrictions and regulations, targeting concerns including national security and monopolistic behaviour claims.<\/p>\n<p>But Macquarie economists expect authorities to pivot back to &#8220;supporting growth&#8221; this year, with some signs that shifting priorities will take some pressure off the real estate sector.<\/p>\n<p>&#8220;It doesn&#8217;t mean that regulation has come to an end, but it does mean that peak regulation, peak property tightening and peak decarbonization are behind us,&#8221; said economists Larry Hu and Xinyu Ji.<\/p>\n<p>Gene Ma, head of China research at the Institute of International Finance, said: &#8220;We expect further monetary easing and greater fiscal expansion this year<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Beijing,\u00a0China, Jan 15 &#8211;China&#8217;s economy expanded at its fastest pace for 10 years in 2021, according to an AFP poll of analysts, but its strong recovery from the Covid-19 pandemic is threatened by Omicron and a property sector slowdown. The eight percent growth would be well above the government&#8217;s target of more than six percent, [&hellip;]<\/p>\n","protected":false},"author":12327,"featured_media":74209,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1982],"tags":[3370,3369,934],"coauthors":[],"class_list":["post-75591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trade","tag-chinas-economic-growth","tag-chinas-property","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.7.1 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>China&#039;s economy grew 8% in 2021 but property, virus threats loom: AFP poll - Capital Business<\/title>\n<meta name=\"description\" content=\"Beijing,\u00a0China, Jan 15 -China&#039;s economy expanded at its fastest pace for 10 years in 2021, according to an AFP poll of 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