Slower Chinese economy expected until mid-2012Thursday 22 Dec 2011 China’s conundrum with a lack of affordable housing and escalating property prices has seen as at November 2011, a 90% operating rate on 10 million affordable units. However, some question the operating rate quoted in Q3 of 2011 as at the end of Q1 there was only a 10.8% operating rate on these units. To meet this figure it is thought that many “starts” could be measured by simply breaking ground. By this reckoning there could still be plenty of potential for suppliers of materials to the building sector.The Chinese Government’s effort to cool the property market has now meant that many local authorities are unable to fund affordable housing projects due to lower valued assets restricting leverage on loans, and fewer taxes being collected through development of more up-market housing. It is expected that the Chinese economy will continue to cool off until the second quarter of 2012, this is a deliberate act by the Government to stem inflation in the rapidly growing economy. It was reported by some NZ exporters that last month wholesalers in China were discounting logs and selling below cost to move logs and stimulate cashflow, this has cleared some logs and is a boost for New Zealand exporters. The rate of increase in log imports into China is continuing to grow at a steady 30% year-on-year. Source: www.nzxagri.co.nz/agrifax |
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