China in the last quarter has faced a lot of challenges and issues in the economy and country as a whole. They have been through an energy crisis, industrial manufacturing issues, and house prices issues.
Initially, China faced issues due to the de facto ban on Australia for coal import, this was leading to China’s economic loss due to a reduction in the production of heavy and industrial materials and machines. Best started importing the same from Indonesia and somehow they manage to get out of that problem.
Then China faced the issue of international debt by private organizations. Evergrande was one of the concerns for China in terms of making the international payment in time. China then advised everyone to make the payments in time and not to be defaulters while making payments in an attempt of keeping the reputation up.
Now China is going through to regulation crisis over controlling the price of the houses in central China.
In China due to the continuously in the need for houses is continuously increasing. Since the Chinese government is continuously trying to regulate and control the prices of houses rice has only been 6%. But still considering The glut of controls this price rise is big enough to bother the general public.
The problem of Wuhan is a problem for the whole country. Real estate developers are putting a lot of pressure on home prices and increasing their price sensitivity which is already threatening the wider economy of China.
In recent years authorities in China have introduced me many measures to carefully manage and avoid the price increase as much as they can so that they can also avoid the bubble burst of this sector.
Rapid urbanization after 1990 many people have moved to the city places so that it has been found that the need of houses has gone up considerably.
Not only the demand for new homes have gone up but also the depth of Chinese real estate developers has increased, they have been pressurized by the Beijing government to reduce the leverage post-pandemic. Due to the liquidity issue Evergrande and some peers have faced the issue.
China is been in an internal crisis for a long and let’s hope this gets solved as soon as possible.
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