[Voice of Hope September 18, 2023](Interview and report by our reporter Wang Xiao)
Data from the National Bureau of Statistics of the Communist Party of China was recently released, and the International Monetary Fund recommended that the Chinese government use domestic consumption as its economic growth model. Xie Tian, a professor at the Aiken School of Business at the University of South Carolina, said: The decline in the number of imports and exports that drive China’s economic growth is worrying, and real estate companies are too heavily leveraged and borrow too much money, putting the real estate industry in deep trouble.
According to France Radio’s report on the 16th, International Monetary Fund (IMF) President Georgieva said in her latest interview with Reuters that the International Monetary Fund (IMF) plans to strongly urge the Chinese government to transform its economic growth model and abandon debt-based Powering infrastructure investment and real estate, shifting the growth model toward more domestic consumption.
According to data from the National Bureau of Statistics of the Communist Party of China on September 15, in August, the total import and export of goods was 3,588.7 billion yuan, a year-on-year decrease of 2.5%. Among them, exports were 2,038.4 billion yuan, down 3.2%; imports were 1,550.4 billion yuan, down 1.6%. From January to August, the total import and export of goods was 27,083.3 billion yuan, a year-on-year decrease of 0.1%. Among them, exports were 15,466.7 billion yuan, an increase of 0.8%; imports were 11,616.6 billion yuan, a decrease of 1.3%.
From January to August, the national fixed asset investment (excluding rural households) was 32,704.2 billion yuan, a year-on-year increase of 3.2%, down 0.2 percentage points from January to July. Among them, infrastructure investment increased by 6.4% year-on-year, manufacturing investment increased by 5.9%, and real estate development investment decreased by 8.8%. The sales area of commercial housing nationwide was 739.49 million square meters, a year-on-year decrease of 7.1%; the sales volume of commercial housing was 7.8158 billion yuan, a decrease of 3.2%. Private fixed asset investment fell by 0.7%.
Professor Xie Tian told Voice of Hope on September 18: First of all, the Chinese Communist Party’s economic data is not trustworthy, especially some domestic data, which are decorated to enhance economic expectations. China’s biggest problem is the decline in imports and exports, which is the real driving force behind China’s economy.
He said: “Real exports to Europe and the United States are declining. And the magnitude is relatively large. These declines have been offset by exports to ASEAN and Russia. But in fact they are still declining. The entire economy is under great pressure. Because of the real estate thunderstorm It is still continuing and getting worse. The industrial chain migration in Europe and the United States continues, and the CCP and Russia are barter trades. In fact, they cannot earn foreign exchange, and the repayment of these maturing foreign debts and interest is a huge pressure.”
Chinese authorities have eased mortgage lending standards in major cities including Beijing and Shanghai, allowing first-time homebuyers and banks to renegotiate loan rates, and introduced tax incentives for households and businesses to support consumption in an effort to address the critical real estate industry crisis. and other measures, but house prices fell again in August, indicating that the above-mentioned government measures have not had an effect.
State-owned real estate developer Sino-Ocean Group Holdings Co., Ltd. issued an announcement on the 15th that it would suspend the payment of all overseas debts. Du Liang, chairman of Evergrande Wealth, one of the largest real estate companies in China, a financial management company under Evergrande Group, and many others have been subject to “criminal coercive measures” by the Shenzhen police. The Paper said that Evergrande Fortune was suspected of illegal fund-raising. Chinese media Tencent News disclosed on August 30 that Xu Jiayin, the founder of Evergrande Group, is currently based in Guangzhou and is not allowed to meet outsiders at will.
Xie Tian said: “The key factor in real estate now is that it has too much leverage, that is, it borrows too much money. Another thing is that the powerful people of the Chinese Communist Party make too much money. If you think about such a company, its assets may be tens of billions. It has incurred a debt of 2.4 trillion. Whoever lent it money and watched helplessly as it could not get its money back were all the red second generation – those behind the white gloves who took it away. This money will never be returned. .”
According to Securities Times, as of the end of 2022, China Evergrande holds a total asset value of 1.84 trillion yuan, of which properties under development are major projects with an amount of up to 1.14 trillion yuan, and cash and cash equivalents are only 4.334 billion yuan. The total liabilities are 2.44 trillion yuan.
According to Deutsche Welle, weak domestic consumption, difficulties in the real estate market and weakening demand for Chinese exports in overseas markets have made China’s economic recovery face many difficulties after the lifting of epidemic restrictions at the end of last year.
Editor in charge: Lin Li
Tags: Chinas economy collapse International Monetary Fund prescribes International Monetary Fund Domestic consumption
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