Commentary: How to Break Out of China’s Property Downward Spiral

The Chinese government has set a target of 5% GDP growth for 2024, a goal that appears only slightly less than 2023’s 5.2%.

However, the 2024 target is notably ambitious considering 2023’s growth was built on the modest 3% growth of 2022. Achieving 5% growth from the higher baseline of 2023’s 5.2% presents a greater challenge.

In 2023, China’s economic downturn was due largely to a sluggish real estate sector. Stabilizing this market is crucial to meeting this year’s growth targets. Despite a series of supportive policies, home sales have yet to see any significant improvement. Sales in the first two months of 2024 continued to lag behind the same period last year. The persistent strain on the sector is primarily because rescue efforts have so far focused on stimulating demand, with insufficient measures to support developers on the supply side.