China's Bursting Housing Bubble Sows Economic Uncertainty
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China's housing market bubble is bursting, causing economic turmoil that is hard to predict. The property sector accounts for a massive portion of China's GDP.
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House prices are falling despite government efforts to prop up the market. This is damaging consumer confidence and employment, especially in smaller cities.
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Risky investments by developers like Evergrande, based on presales and debt, fueled the bubble. Banks cutting off financing burst it.
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The crisis may cause banks trouble from unpaid loans, and drag down growth. The property market will likely shrink long-term.
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Impacts globally are uncertain. Weak Chinese demand could hurt exports and strain trade relations. Defaults may cause losses somewhere in the world economy.