The World Bank’s latest take on China’s slowdown is plenty sobering for the broader Asian region. But odds are, not quite sober enough.
Bad news on the property sector of Asia’s biggest economy continues to flood the airwaves and send ripples through world markets. As the World Bank cuts its 2024 China growth projection to 4.5% from 4.8%, the sense among economists is that the multilateral lender is still far too optimistic.
Take the latest assessment by the Asian Development Bank of China’s fallout for the region. As weaknesses in China’s property sector “hold back regional growth,” the “risks to the outlook have intensified,” the ADB warns.
The travails of China Evergrande Group – which resumed trading on Tuesday – have dented confidence, prompting investors to flee. The developer, which defaulted in 2021, recently admitted a major debt restructuring plan has failed. Its chairman, Hui Ka Yan, is under criminal investigation, prompting regulators to bar the company from issuing new debt.