Goldman Sachs shared some key points on China in a recent video interview on CNBC:
- Consumption strength may be linked to the Singles Day sales (November 11).
- It remains to be seen whether this is a sustainable recovery in consumption.
- The weakness in the property sector and outside investment may indicate ongoing challenges in the property sector and local government financing vehicles.
- Policy makers cannot afford to relax, as more work needs to be done.
- The Chinese economy is currently facing a self-fulfilling negative loop in many areas.
- If property prices are falling, it may not be the best time to buy, leading to a self-fulfilling negative feedback loop.
- Government policies are needed to address these issues and break the negative feedback loop.
- The government needs to manage the property sector and the growth slowdown effectively to prevent further decline.
- The property sector has two parts: the traditional developer model and the new part that the government is leveraging to smooth the slowdown.
- It’s important to separate the two parts of the property sector, as the old model may still face challenges.
This content was originally written by Eamonn Sheridan and published at www.forexlive.com.
