Coronavirus is wreaking havoc on the Chinese economy: Inflation surged in January, home sales plunged in the first week of February and GDP growth is expected to be 1 percentage point lower in 2020. As the true cost of Beijing’s coronavirus cover-up adds up, the Communist Party is quietly ‘removing’ senior officials over their mishandling of the epidemic.
The first week of February was particularly grim for Chinese real estate. New apartment sales dropped a staggering 90% from the same period a year ago, according to data on 36 cities collected by China Merchants Securities Co. The resale market was also hit hard: Existing home sales plunged 91% in eight cities where data are available.
Even before the outbreak, housing was already on the back foot as government officials adopted measures to curb over-lending and runaway price growth. As Bloomberg reports, Chinese real estate is on course to experience a bigger drop than during the 2003 SARS pandemic. Shenzhen has reportedly banned all forms of home sales over the rise of infections in the sub-provincial city. Shenzhen’s metro region is home to more than 23 million people. While some analysts expect home sales to pick up later this year, citizens in quarantined zones have seen their incomes decline. Lockdowns impact as many as 400 million Chinese citizens. On Monday, the National Bureau of Statistics reported that China’s consumer price index surged 5.4% annually in January, the highest in eight years. Compared with December, consumer prices spiked 1.4% after flat-lining the month before.
Soaring Inflation and Crashing Home Sales: Coronavirus Devastates China’s Economy, CCN, Feb 12
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