China Shifts Economic Focus from Real Estate to Manufacturing, Despite Risks
-
China is steering its economy away from real estate and local debt and toward more investment in manufacturing and central government borrowing. This carries risks of oversupply and could anger trading partners.
-
After reining in lending to housing, policymakers are reluctant to rescue the struggling real estate sector, which makes up 25% of the economy.
-
Factories are seeing huge investments, like enough solar panel plants to supply global demand and new semiconductor and electric vehicle factories.
-
Economists say China faces its toughest economic challenges since the Mao era, but big bets on new manufacturing tech may pay off long-term.
-
China's overall debt relative to economic output keeps ballooning, so its addiction to borrowing to fuel growth persists despite repeated promises to tame it.