{"id":1004672867,"date":"2023-07-19T10:17:51","date_gmt":"2023-07-19T18:17:51","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004672867"},"modified":"2023-07-20T05:26:28","modified_gmt":"2023-07-20T13:26:28","slug":"on-the-news-can-we-talk-about-china","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/","title":{"rendered":"On the News: Can We Talk About China?"},"content":{"rendered":"
\"\"<\/a>

CPE Executive Editor Therese Fitzgerald<\/p><\/div>\n

There has been a lot of handwringing over the $1.5 trillion of U.S. commercial real estate debt coming due over the next two years and what it could do to the U.S. economy. Granted, where the office sector is concerned, there will be some defaults, some workouts, some disruption in the banking sector as well as some opportunity for real estate investors and financiers. But the impact is likely to pale against how China\u2019s housing crash has worn on its economy and the wellbeing of its citizens.<\/span><\/p>\n

Yesterday, Goldman Sachs<\/strong> joined other U.S. banks in cutting China\u2019s full-year GDP estimates to 5.4 percent from 6 percent. While 5.4 percent still seems respectable, it reflects the weaker-than-expected post-COVID recovery following the end of China \u2018s zero COVID strategy in January.<\/p>\n

Factors contributing to the lowered expectations<\/a> include: record youth unemployment, the persistent housing market crisis, a slow restructuring of the economy, and sagging confidence among consumers and investors, Goldman Sachs\u2019 Chief China Economist Hui Shan told CNBC on Monday. Plus, stimulus efforts by the Chinese government have not had the desired impact, she added.<\/p>\n

To understand the impact of China\u2019s housing market debacle on the country\u2019s economy, it\u2019s important to note that real estate and related activities in China are roughly 25 percent of GDP, and 45 percent of household wealth<\/a> is in housing. In smaller cities, where most of the housing has been built, that figure could be as much as 70 percent. Real estate is one of the few investment opportunities in China, and homeownership (as many as your savings will allow you to buy) is highly valued. So, in addition to being a big economic driver, the housing market is central to personal wealth, also.<\/p>\n

Facilitated by government reforms and generous lending, housing boomed in China for some time. But home sales slowed in 2021 due in part to COVID-related restrictions<\/a>. That left developers short on cash to finish projects and meet their tremendous debt obligations.<\/p>\n

Yesterday, the largest of these developers, Evergrande<\/strong>, reported that its combined losses for 2021 and 2022 totaled $81 billion<\/a>, according to the Associated Press. The company had to report its losses<\/a> to facilitate the restructuring of $340 billion of debt obligations and to avoid being delisted on The Hong Kong Stock Exchange.<\/p>\n

\"Chinese<\/a>

Chinese President Xi Jinping speaking at a 2015 luncheon held in his honor. Image courtesy of State Department<\/p><\/div>\n

Meanwhile, many residents who paid for unbuilt apartment units are in limbo\u2014and in debt<\/a>. Construction employees, construction companies and suppliers are short on work. The housing crash has also had political impacts, pitting Beijing against local governments that relied on land sales to housing developers before the government cracked down on how much developers could borrow. The Peoples Bank of China has stepped in to offer attractive mortgage rates and credit to developers to help them finish projects, but the market is still struggling.<\/p>\n

The Fed Is Watching<\/h2>\n

Certainly, $1.5 trillion of U.S. CRE maturities should not be minimized by comparing it to China\u2019s housing woes. Rising interest rates and decreasing values have already left many loans \u201cunderwater,\u201d<\/a> Paul Fiorilla of Yardi Matrix<\/strong> wrote for CPE. And reduced demand for office space will definitely have its impacts. But it does help put things in perspective.<\/p>\n

Testifying before the House Committee on Financial Services, Fed Chair Jerome Powell last month said the Fed \u201cis very focused on the commercial real estate situation,\u201d and is working closely with small banks that have a high concentration of these loans. At the same time, banks with less than $100 billion in assets will be exempt from increased capital requirements that the Fed is proposing in response to three bank failures earlier this month.<\/p>\n

The next two years will be stressful for CRE, but, with some government intervention and industry self- regulation, they will probably not be devastating.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you are worried about CRE’s pending troubles, you may want to consider what is happening in the world’s second-largest economy.<\/p>\n","protected":false},"author":756,"featured_media":1004673037,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21742,21747,21684],"tags":[38314,33435],"class_list":["post-1004672867","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest","category-office","category-viewpoint","tag-evergrande-real-estate-group","tag-goldman-sachs"],"acf":[],"yoast_head":"\nOn the News: Can We Talk About China? - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"On the News: Can We Talk About China?\" \/>\n<meta property=\"og:description\" content=\"If you are worried about CRE's pending troubles, you may want to consider what is happening in the world's second-largest economy.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-19T18:17:51+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-20T13:26:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/07\/Chinastory-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Therese Fitzgerald\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/\"},\"author\":{\"name\":\"Therese Fitzgerald\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/72a93f240402a8c7f4e56a69aed5f713\"},\"headline\":\"On the News: Can We Talk About China?\",\"datePublished\":\"2023-07-19T18:17:51+00:00\",\"dateModified\":\"2023-07-20T13:26:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/\"},\"wordCount\":664,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2023\\\/07\\\/Chinastory-1.jpg\",\"keywords\":[\"Evergrande Real Estate Group\",\"Goldman Sachs\"],\"articleSection\":[\"News\",\"Office\",\"Viewpoint\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/\",\"name\":\"On the News: Can We Talk About China? - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2023\\\/07\\\/Chinastory-1.jpg\",\"datePublished\":\"2023-07-19T18:17:51+00:00\",\"dateModified\":\"2023-07-20T13:26:28+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/72a93f240402a8c7f4e56a69aed5f713\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/#primaryimage\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2023\\\/07\\\/Chinastory-1.jpg\",\"contentUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2023\\\/07\\\/Chinastory-1.jpg\",\"width\":800,\"height\":620,\"caption\":\"Luncheon honoring Chinese President Xi Jinping. Image courtesy of State Department\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/on-the-news-can-we-talk-about-china\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"On the News: Can We Talk About China?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#website\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/72a93f240402a8c7f4e56a69aed5f713\",\"name\":\"Therese Fitzgerald\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2023\\\/02\\\/head.jpg?w=96\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2023\\\/02\\\/head.jpg?w=96\",\"contentUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2023\\\/02\\\/head.jpg?w=96\",\"caption\":\"Therese Fitzgerald\"},\"description\":\"Therese Fitzgerald has nearly 20 years experience writing and editing commercial real estate content. She got her start writing about the New York City market with Real Estate Weekly and later joined CPE\u2019s predecessor publication, Commercial Property News, where she held various positions including editor in chief. In addition to working on the CPE and MHN websites, she edits CPE's Capital Markets Newsletter and MHN's Finance & Investment Newsletter. Tune into her Sustainability Street podcast on CPE.\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/author\\\/therese-fitzgerald\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"On the News: Can We Talk About China? - Commercial Property Executive","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/","og_locale":"en_US","og_type":"article","og_title":"On the News: Can We Talk About China?","og_description":"If you are worried about CRE's pending troubles, you may want to consider what is happening in the world's second-largest economy.","og_url":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2023-07-19T18:17:51+00:00","article_modified_time":"2023-07-20T13:26:28+00:00","og_image":[{"width":800,"height":620,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/07\/Chinastory-1.jpg","type":"image\/jpeg"}],"author":"Therese Fitzgerald","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/#article","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/"},"author":{"name":"Therese Fitzgerald","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713"},"headline":"On the News: Can We Talk About China?","datePublished":"2023-07-19T18:17:51+00:00","dateModified":"2023-07-20T13:26:28+00:00","mainEntityOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/"},"wordCount":664,"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/07\/Chinastory-1.jpg","keywords":["Evergrande Real Estate Group","Goldman Sachs"],"articleSection":["News","Office","Viewpoint"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/","url":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/","name":"On the News: Can We Talk About China? - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/07\/Chinastory-1.jpg","datePublished":"2023-07-19T18:17:51+00:00","dateModified":"2023-07-20T13:26:28+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713"},"breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/07\/Chinastory-1.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/07\/Chinastory-1.jpg","width":800,"height":620,"caption":"Luncheon honoring Chinese President Xi Jinping. Image courtesy of State Department"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/on-the-news-can-we-talk-about-china\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"On the News: Can We Talk About China?"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713","name":"Therese Fitzgerald","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96","caption":"Therese Fitzgerald"},"description":"Therese Fitzgerald has nearly 20 years experience writing and editing commercial real estate content. She got her start writing about the New York City market with Real Estate Weekly and later joined CPE\u2019s predecessor publication, Commercial Property News, where she held various positions including editor in chief. In addition to working on the CPE and MHN websites, she edits CPE's Capital Markets Newsletter and MHN's Finance & Investment Newsletter. Tune into her Sustainability Street podcast on CPE.","url":"https:\/\/www.commercialsearch.com\/news\/author\/therese-fitzgerald\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/07\/Chinastory-1.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004672867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/756"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004672867"}],"version-history":[{"count":10,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004672867\/revisions"}],"predecessor-version":[{"id":1004673086,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004672867\/revisions\/1004673086"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004673037"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004672867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004672867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004672867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}