Liu He: The real estate industry is the pillar industry of China’s national economy

Chinese Vice Premier Liu He delivered a speech at the World Economic Forum held in Davos, Switzerland on the 17th local time. Liu He said that some people say that “China wants to engage in a planned economy”, which is simply impossible. Liu He said that the relationship between systemic risk and moral hazard in the real estate industry must be properly handled. Liu He emphasized again that the real estate industry is the pillar industry of China’s national economy. Loans related to real estate account for nearly 40% of bank credit, real estate-related income accounts for 50% of local comprehensive financial resources, and real estate accounts for 60% of urban residents’ assets. In response to the recent pessimistic view of the market on China’s real estate industry, Liu He believes that, in the past, China is still in a stage of rapid urbanization, and the huge demand potential will provide strong support for the development of the real estate industry. | Related reading (Financial Association)

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The Davos Forum is the highlight of this week, and the meeting between Liu He and Yellen is the top priority of global attention. The global economy currently lacks a reliable growth point. As the second largest GDP in the world and the largest single market in the world, China plays an important role, and the voice of Chinese leaders will always be the focus.

In this speech, Vice Premier Liu He clarified several points: first, China will not engage in a planned economy; second, real estate is still the pillar of the Chinese economy; third, it is China’s obligation to take into account carbon neutrality while developing Fourth, common prosperity is a long-term task and will continue to advance; fifth, China’s epidemic transition is stable, and production and life have returned to normal.

These statements are quite positive for China and the whole world. They will help China’s economy recover quickly in 2023, and it will also help the world and China to interact and cooperate positively in the fields of trade, commerce, science and technology, and culture. I believe this is what business elites and political leaders all over the world want to see, but the specific implementation still depends on the results.

Liao Zhibin [Silver Zhuo F&L]

It is a rare absurdity in the world to convey a rational theory for real estate speculation and limit the fall of housing prices, and to admit that income from land sales is the most important support for high salaries of civil servants.

From this, it is speculated that the rapid rise of corporate costs and the suppression of household consumption driven by high housing prices in the past two decades will continue, leading to the inevitable decline of more industries and the continued flood of low-efficiency investment led by the government.

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