For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only.
English
  • English
  • French
en
  • en
  • fr
Filter by theme
Filter by date
Filter by boutique
Filter by theme
Filter by date
Filter by boutique
No posts matching your criteria
Clear theme
Clear all
No posts matching your criteria
Clear date
Clear all
No posts matching your criteria
Clear boutique
Clear all
For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only.
English
  • English
  • French
en
  • en
  • fr
© 2021. BNY Mellon Investment Management EMEA Limited. All rights reserved.
IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
21 October 2021

Is the writing on the wall for Chinese real estate?

The crisis in the Chinese real estate sector warrants close attention but seems unlikely – as things stand at this point in time – to create a systemic challenge for investors.

 

We expect elevated volatility within directly- and indirectly-linked areas but knock-on consequences to the wider China economy to be limited.

 

In our view, the government may want to set an example, but it’s likely to ensure there’s no widespread contagion across the property sector, not least given the large percentage of China’s household wealth tied into the sector.

 

The agenda of the Chinese authorities in recent years has been to deleverage the financial system, encourage a less debt-dependent growth model, and reduce moral-hazard risks. The timing of the current real estate crisis might be a consequence, in part at least, of this agenda.

 

Our base case remains that authorities have the capacity to underwrite the situation and instil confidence and will do so if required. However, they may also like to see over-aggressive developers and lenders suffer some pain, in keeping with their longer-term ambitions around rebalancing the economy.

 

Newton Global Emerging Markets team

 

Doc ID: 739655

Please note the content on this website is for Investment Professionals only and should be shared responsibly. No other persons should rely on the information contained within this website.

 

Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA), BNY Mellon Fund Managers Limited (BNYMFM), BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA, BNY MFML or the BNY Mellon funds.

Subscribe to updates