China faces into an uncertain 2024 with an economy hobbled by a drawn-out property crisis

At Qingdao port in China’s Shandong province, a giant standing crane is lowering one container on to the dock while others are gliding along on driverless vehicles. The crane is powered by hydrogen and the entire operation is automated and controlled by a 5G connection that uses data from 30 high-definition cameras.

The port is the first of its kind in the world and it exemplifies the way Chinese industry is leading the way in some innovative technological applications and sustainable energy. But while Qingdao saw its traffic increase in 2023, the broader picture for Chinese exports was bleaker and November’s figures were the first in six months to show a year-on-year increase.

It has been a disappointing year for the Chinese economy, as the recovery that followed the end of three years of zero-Covid policies proved much weaker than expected. The International Monetary Fund (IMF) said it expects the Chinese economy to grow by 5.4 per cent this year but to slow to 4.6 per cent in 2024.

Although analysts identify a number of problems that are holding the economy back, the most commonly cited is a prolonged downturn in the property market. The crisis has not only pushed some of China’s biggest private developers to the verge of bankruptcy but has hit related sectors including appliances.

With more than 60 per cent of household wealth invested in property, the downturn in the market has made consumers more reluctant to spend. And it has had a huge impact on the finances of China’s debt-laden local authorities, which draw much of their revenue from leasing land to developers.

Wang Tao expects property sales to stabilise in the coming months but that there would still be a 10 per cent decline in housing starts and a 5 per cent decline in home sales for 2024 as

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