China is currently addressing two fronts in its economy. Internationally, it's no secret that the US is imposing lopsided tariffs on Chinese goods. Domestically, China is trying to control its currently-hot real estate market in case it all goes wrong. However, analysts say that the property market should be China's real concern at the moment rather than its trade dispute with the US.
Larry Hu, China economics head at Macquarie, presented his idea that there is a bigger risk in leaving the property market alone. Trends suggest that the real estate market in lower-tier cities will experience a downturn. A report from CNBC suggests that the property market has a large say on what happens in the local government; if everything goes well, China may go on to reap the benefits of a robust economy. However, if it goes bad, then the country may be in for rough times ahead.
Current estimates have been forecasting in the positive, with average selling prices up by 28.1 percent from a period starting from January 2016 to May 2018. However, since property values have experienced a downward spiral, the country reacted by imposing a ban on corporate purchases. It's an effective move, but it may impact the growth of the country's economy somewhere down the line.
While this is the case, studies suggest that Trump's trade tariffs still have an impact on the property market. SCMP reports that the economic data gathered on the trade war didn't return a positive report. This may have an effect on the economy that, if not yet felt at the moment, may be felt down the line eventually.
Trump and Chinese president Xi Jinping are scheduled to meet on December 1 in Argentina. It is reported that they will talk about matters in different diplomatic areas. Local observers are hoping that included in these discussions are agreements to be signed that will lift the trade tariff, if only in some sectors of both country's economies, if not all.
Analysts are viewing a 'ceasefire' is not impossible after all. If and when this happens, a new set of tariffs scheduled for imposition in the New Year may not happen at all, as it will be put on hold.
China's economy has not halted at all, but it did slow down. Viewers are looking at it as a direct effect of the trade war. Car sales, property markets, and consumer electronics were seen as direct sufferers of the economic slowdown.
