Alice Han

Mertz is actually going to be there in a few days.

So we'll have to see what the German chancellor says from his high-level meetings, which is the first in many years from a German chancellor going to China.

I mean, we ran regressions and did research on this.

I would probably say 27 to 28.

I think we're probably going to see prolonged contraction in the real estate sector.

And I don't think, crucially, we're going to see a lot of policy support at this NPC meeting coming from the government, because frankly, they wanted this to change.

They wanted this asset bubble to break.

And they're more interested in boosting investment and growth elsewhere in the economy, namely the manufacturing sector, which leads back to the beginning of this

discussion.

But to your point, just so people get perspective, Chinese households used to have around 2020 to 2021, 70% of their wealth tied in real estate.

It's now gone down to 60% just purely because people are buying less, but also prices have gone down.

And for reference, only 5% is in equities and 25% is in savings deposits.

If you look at America or many of the developed countries, that ratio somewhat flipped, whether it's more equities and heavy as opposed to real estate.

So

This is a structurally sui generis phenomenon in China where household consumption is so heavily associated with real estate prices.

Okay, we'll be back with more after a break.

Stay with us.

Welcome back.

For years, Western travelers have raved about China's high-speed rail and glittering skylines.

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