Demand During a Slowdown: How Will Slowing Chinese Economy Affect Property Sectors in China and Other Asia Pacific Countries?
The Chinese government officially lowered its GDP target growth to 7.5 percent in March, the first time since 2005 that the target has been moved south of 8 percent. After GDP growth of 8.9 percent in 2011 and 10.4 percent in 2010, the world’s second largest economy is definitely cooling. China has slowing exports and an even greater slowdown in imports, and continued deceleration is predicted for the coming months. The “bao ba” (“protect the eight”) target that the Chinese government has set as a minimum for the past seven years is now officially over. Should investors be worried?
The acceptance of slower growth by the Chinese government has certainly created some concern among investors. But actual growth will probably be higher than the government’s 7.5 percent GDP target growth for 2012, and the impact of this slowdown in the region will probably be moderate. As a 5 March article in the Financi