While PMI came in about as expected, which is good in China's case that it didn't continue in contraction, other serious problems are developing, mainly in the Real Estate sector, which has been struggling with a bubble.
China new homes prices have fallen 40.96% in the week ending January 29 as compared to the previous week.In addition, there has been a 81.92% drop in sales closing this week vs last week (Jan 23-Jan 29).
Even though the Chinese New Year holiday has a seasonal effect, the sales have dropped 36% vs the 7 year average of the seasonal period.
Analysts belive that Chinese home builders may have to continue cutting prices just to keep cash flowing, further devaluing property. This happened last year and Chinese home buyers nearly tore down a builder's office.
5 years ago
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