Chinese economy may see tough times ahead

For the past several months now, China has seen an increasingly weaker manufacturing base as both the US and Europe face mounting debt and falling revenue. However, according to the BBC, China may have more problems over the horizon as the latest economic data from China have backed up the view that the economy there is cooling.

According to the report, other industries in the burgeoning nation may be at risk as new home prices in 52 out of 70 Chinese cities fell in December from the previous month, the National Bureau of Statistics said.

Some analysts have warned that the cooling property market is putting downward pressure on the overall economy.

Foreign direct investment also fell for the second straight month in December. This could be especially worrying, as investment into China has surged in recent years with international investors looking to profit from China‘s booming economy, but with less foreign investors, Chinese business leaders may have to look locally for more credit and capital.

Originally, Chinese authorities introduced a host of measures last year to try to prevent speculative bubbles in the property market. Curbs included bans on buying second homes in some cities and raising the minimum deposit as well as property taxes. Now though, with a cooling economy, such rules may be lifted, and officials from Beijing may introduce a new round of policies to forcefully deflate the yuan in the face of falling interest in Chinese manufacturers.

(아주경제 앤드류 이 기자)

Park Sae-jin swatchsjp@ajunews.com