Year-end statistics released last week relieved the fears of a hard landing by most China-watchers, although some still anticipate a biting Year of the Dragon. Masked by the glowing numbers, the real estate sector is the biggest concern as it goes from bad to worse.
Gross domestic product (GDP) climbed 8.9 percent in the last quarter and 9.2 percent in 2011. Industrial production rebounded to 12.8 percent in December, from November’s 12.4 percent, while retail sales rose 18.1 percent over the same period. Meanwhile, inflation was also contained, with a 4.1 percent rise in prices.
However, the real estate sector, which accounts for six to seven percent of the GDP, may be overlooked while the country pays much attention to the export sector. For the third consecutive month in December, prices continued to slide.
Unsold properties were also 26 percent higher than a year ago based on an end- 2011 inventory by developers. New home sales finished at a weak 3.9 percent in the second half of last year, as opposed to the first half’s 12.1 percent.
“Growth will moderate further in the coming two quarters with further weakness in the property sector and infrastructure investments,” said Dong Tao, an analyst at Credit Suisse.
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