China's Consumption Slowdown Linked to Real Estate
This is a China news story, published by CNBC, that relates primarily to S&P Global Ratings news.
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•China's local government debt problems are a hidden drag on economic growth
88% Informative
Analysts are looking at connection between China 's real estate slump and local governments' financing.
"Macroeconomic headwinds continue to hinder the revenue-generating power of China 's local governments," says S&P Global Ratings .
The bulk of Chinese household wealth went into real estate in the last two decades .
Beijing began cracking down on developers' high reliance on debt in 2020 .
China 's debt-to-GDP has climbed by almost 30 percentage points to 310% of GDP in the second quarter of 2024 .
Local government-affiliated business entities have taken on significant levels of debt to fund public infrastructure projects.
The LGFV sector is a "bigger grey rhino than real estate," Natixis' Alicia Garcia-Herrero said.
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