Economists believe that China will need to rebalance its economy and reduce its dependence on the real estate sector to ensure its future economic growth.
Atif Mian, professor of economics at Princeton University, shared an article on whether China’s oversized real estate sector will exacerbate the economic slowdown induced by the Delta variant. China’s economy rebounded quickly from the pandemic, growing 8% in 2020 and over 12% in the first half of 2021. The Delta variant, however, is slowing growth, as the country faces additional challenges such as as productivity decline, water scarcity and rising inequality.
China’s economic growth has been supported by a real estate boom, which has resulted in an oversized real estate sector. It is estimated that real estate production and real estate services account for 29% of Chinese GDP. The real estate sector has grown to such an extent that any housing slowdown will become difficult to absorb, which may impact the overall growth of the country.
The bankruptcy of China’s second-largest real estate developer Evergrande, with more than $ 300 billion in debt, will be the largest in the country. China is also facing a wave of weaker real estate companies, which are facing debt renewal issues. The biggest challenge for China over the next few years will remain to rebalance its economy and divert it from real estate production and services, the article notes.
I will point out two main areas of concern.
First, real estate accounts for 29% of Chinese GDP according to Rogoff and Yang (link below)
This production is critically dependent on * new credit flows * in the real estate sectorhttps://t.co/aHuzbrpdYe
– Atif Mian (@AtifRMian) September 22, 2021
Charles Kenny, senior researcher at the Center for Global Development, a nonprofit think tank, shared an article on how various sectors in the UK are reporting declining production caused by labor shortages . Output growth in the transportation, chemicals, metals and mining sectors fell to its lowest level in six months in August due to labor shortages and supply chain disruptions. supply.
Transportation companies were hit the hardest due to recruitment issues and the shortage of truck drivers which impacted their ability to fill orders. The chemicals, mining and metals sectors also contracted due to raw material shortages and supply chain disruptions. Production in the tourism and leisure sector and food and beverage manufacturers, however, improved in August. The tourism and leisure sector has rebounded strongly due to the relaxation of travel restrictions linked to Covid-19.
However, manufacturers continue to face a number of challenges as major import markets face new outbreaks caused by the Delta variant and low vaccination rates resulting in disruption in the drug chain. ‘supply.
“Companies urged to prioritize their hiring and retention policies amid new data revealing the number of UK sectors reporting output growth fell to six-month low in August , driven by labor shortages. “https://t.co/cak9Pc9vZd
– Charles Kenny (@charlesjkenny) September 22, 2021
Armine Yalnizyan, Atkinson Fellow on the Future of Workers, shared her article on how the coronavirus pandemic pushed female employment rates in Ontario, Canada, to 1994 levels. pandemic have mainly affected the hospitality, non-essential retail and childcare sectors where women hold the majority of jobs. Some of those jobs are expected to return once the pandemic is over, but some businesses are expected to close forever.
The pandemic caused the average annual employment rate of women in Canada in 2020 to fall to levels last seen in 1998. The average annual employment rate fell to levels seen in 1994 in Ontario and Alberta to levels observed in 1985. The situation did not improve in 2021., with only 56.7% of the female population aged 15 and over having paid work.
The fourth wave of the pandemic in Canada makes matters even worse, with employment rates expected to remain below pre-pandemic levels for some time. Yalnizyan noted that simply reopening the economy will not help improve the employment rate, but an inclusive recovery that provides equal opportunities for women is needed.
So # Elxn44 is complete, but not the assignment.
How far the pandemic has reduced female employment rates depends on where you live in Canada.
In Ontario, we are back to 1994 levels.
– Armine Yalnizyan (@ArmineYalnizyan) September 22, 2021