China’s economic malaise will not end until its housing market clears and households have sufficiently rebuilt their savings. These adjustments are far from complete.
Continued declines in housing prices across major and smaller urban areas suggest that prices have further to fall, while housing demand and supply are still sluggish.
Households also remain defensive, with deposit growth outstripping income growth by a large margin. The economic headwinds will entrench precautionary savings behaviour.
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