China’s real estate sector slowdown could impact economic recovery – leading macroeconomic influencers

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Economists opine that China will need to rebalance its economy and reduce its dependence on the real estate sector to ensure future economic growth.

Atif Mian

Atif Mian, professor of economics at Princeton University, shared an article on whether China’s oversized real estate sector will exacerbate the economic slowdown induced by the Delta variant. The Chinese economy rebounded quickly from the pandemic, growing at 8% in 2020 and more than 12% in H1 2021. The Delta variant, however, is slowing down growth, as the country faces additional challenges such as declining productivity, water shortage and rise in inequality.

China’s economic growth was sustained by a housing boom, which resulted in an oversized real estate sector. Real estate production and property services are estimated to account for 29% of China’s GDP. The real estate sector has grown so big that any slowdown in housing will become difficult to absorb, which can…

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