China's Economic Crisis: Real Estate Collapse and Consumer Sentiment

China's economy faces an unprecedented crisis driven by a collapsing real estate market and declining consumer sentiment.

### China's Economic Crisis: The Impact of Real Estate Collapse and Consumer Sentiment
* 📉 Over 40 years after its economic reforms, China is currently experiencing its **worst economic downturn**, with significant challenges ahead for recovery.
* 🏠 The New York Times attributes this crisis primarily to the **collapse of the real estate market**, which has made consumers **increasingly cautious about spending**.
* 📊 A survey indicated that the percentage of Chinese respondents reporting income increases **plummeted from 77% in 2014 to just 39% last year**, reflecting a **stark decline in economic optimism**.
* 💸 The real estate sector, which has long underpinned household savings and local government finances, is now burdened by **massive debts and unsold apartments**, totaling around **$7 trillion**.
* 🔍 The Xi Jinping administration's attempts to reform this dependency have backfired, leading to **widespread bankruptcies and a severe job crisis**, particularly affecting **young people**.
* 🍵 Consumer sentiment has drastically cooled, exemplified by a **significant drop in sales** in sectors like food and beverage, including the **popular milk tea market**.
* 📉 Despite record-breaking exports in some areas, the overall economic outlook remains bleak, with doubts about achieving the government's **5% growth target** amid ongoing real estate turmoil.
* 🚫 The situation is exacerbated by hidden local government debts and a lack of effective economic stimulus measures, leading experts to predict that the **housing market crisis will persist until at least 2025**.

[Why Times 정세분석 2899] 경제 개방 이후 최대 위기 맞은 중국, “붕괴는 아직도 진행중” (2024.9.5)

Why Times

China's Struggling Economy: A Deepening Crisis

China is experiencing its worst economic downturn in over 40 years, with diminishing public confidence in the Xi Jinping government.

The collapse of the real estate market has led to cautious consumer behavior and a significant decline in the perception of wealth among the Chinese population.

The government's attempts to reform the economy and stimulate growth have been hampered by the clumsy implementation of policies, resulting in a tumultuous real estate sector and widespread financial instability.

China's real estate sector has accumulated $7 trillion in excess investment-related debt, leading to bankruptcies and a chain reaction of economic damage.

The government's efforts to minimize corporate liquidations may soon be hampered by a lack of financial capacity to revive the economy.

The collapse of the real estate market has significantly impacted household assets, frozen consumer sentiment, and resulted in a job crisis, particularly affecting young people.

China's theater revenue has halved compared to last year, with the food and beverage market, including the milk tea industry, also facing significant decline.

Netizens are questioning the affordability of luxury items like milk tea amidst wage cuts and layoffs.

The economic downturn is causing both domestic and foreign companies to struggle, leading to workforce reductions and a shift in investment to safer locations.

China's Struggling Economy and Global Impact

The exclusion of 180 Chinese companies from the stock market index has reduced their global market share, prompting the Chinese authorities to focus on increasing exports for economic growth.

Despite record-breaking exports in electric vehicles, batteries, and home appliances, oversupply and a significant real estate downturn are causing profitability to decline.

With hidden local government debts totaling about $7 trillion and no sign of recovery in the housing market, concerns about China's ability to achieve its 5% growth target this year are growing.

Grim Reality of China's Youth Unemployment

The Chinese economy is facing significant challenges, despite authorities' denials.

Youth unemployment is a major issue, with intense competition for job openings and low salary offers.

A student's struggle to find a job after graduation highlights the grim economic reality for many young people in China.