A twofold trend
The reasons behind the current economic situation are twofold. First, China’s export growth - which dropped significantly during the global economic meltdown - is not out of the woods yet.
China’s exports registered a 15-percent growth year on year in the first six months of 2017, a sign that the economy is holding up better than expected.
Yet, we should not be overly optimistic about China’s export performance in 2017 on the whole given uncertainties in other major economies. Overall, there is a high likelihood that China will be able to end negative growth in exports and that the economy will continue to stabilize.
Second, China’s urbanization continues to maintain its strong momentum despite some difficulties. For a long time, the lack of popularity of many small and medium-sized cities - a major bottleneck for their further development - has restricted their urbanization process, the improvement of people’s standard of living, the upgrading of the country’s consumption structure and the expansion of market demand.
As a result, real estate enterprises involved in urban development have had to face many problems, such as difficulty in selling houses in small and medium-sized cities.