分类： business

For decades through the 2010s, global economic observers widely regarded China’s economy as uniquely recession-resistant. Surviving both the 2008 global financial crisis and the 2015 domestic stock market crash and capital outflow event without recording a single quarter of negative growth, the country’s macroeconomic management strategy drew widespread fascination. As early as the late 2010s, analysts noted that Beijing had developed a distinct third tool for economic stabilization beyond the conventional monetary and fiscal policies used by most Western economies.

Standard counter-cyclical policy relies on two levers: monetary policy, which cuts interest rates to encourage private borrowing and investment, and fiscal policy, which directs government spending directly to public projects to boost employment and aggregate demand. China, however, adds a third mechanism: direct credit policy. Leveraging state control over the country’s banking system, Beijing can order state-owned banks to expand lending rapidly during downturns, then rein in credit once growth stabilizes. When extended loans eventually default, the government steps in to remove nonperforming assets from bank balance sheets, allowing the system to continue lending and supporting growth that eventually reduces the relative size of public debt.

Throughout the 2010s, this strategy relied heavily on directing new credit to the real estate sector, fueling what remains the largest property construction and price boom in modern history. That era of endless expansion came to an abrupt end in late 2021, when the default of industry giant Evergrande triggered a wave of bankruptcies and missed debt payments across the entire sector. Since then, property prices have fallen continuously, and housing construction activity has plummeted sharply, according to Bloomberg data.

Yet official GDP growth figures never dipped below 3% even as the property crash unfolded. Mirroring its 2009 and 2015 playbook, Beijing ordered its state-controlled banking system to replace slowing real estate lending with a surge of new loans to manufacturing and industrial firms. The shift succeeded in keeping headline growth stable, leading some proponents of China’s managed market model to declare the strategy a resounding success. In a July 2026 social media post, economist Isabella M. Weber noted that many Wall Street analysts had predicted a 2008-style “Lehman moment” for China in 2021, but the bubble defused without a total financial collapse, arguing that this demonstrated an advantage of state-managed markets over unregulated free markets.

Critics have long warned that this approach carries steep long-term costs: repeated credit-directed stimulus funnels capital to unproductive, politically favored firms, dragging down aggregate productivity growth. This pattern played out in the 2010s, when massive lending to real estate companies diverted resources from more productive sectors. Now, economists warn that the 2022-2024 wave of industrial lending could leave a lasting overhang of “zombie companies” that hoard labor and capital without generating meaningful economic output.

Supporters of Beijing’s approach push back against these warnings, arguing that long-term costs are unproven, productivity is difficult to measure accurately, and any structural issues can be addressed later. They frame the outcome as a victory for China’s policy goals: successfully pivoting the economy away from excessive reliance on real estate development without triggering a broad economic contraction. Proponents of expanded state economic control in other countries have also held up China’s performance as evidence of the benefits of greater government intervention in markets.

However, a closer look at labor market data and independent growth estimates tells a more complicated story. Despite official claims of continued stable growth, China did experience a sharp economic downturn following the property crash, and underlying growth remains far weaker than headline figures suggest.

The first red flag appears in China’s labor market. In 2023, Beijing revised its methodology for calculating youth unemployment to use a narrower definition, after official figures hit record highs. Even with the methodological change, the youth unemployment trend has still moved upward. Official overall unemployment figures show only a small increase, but independent analysts note that these numbers are incomplete: they exclude migrant workers from rural areas, workers who have dropped out of the labor force, and people waiting to start new jobs. Alternative indicators, such as the non-manufacturing employment purchasing managers index, have remained consistently below pre-pandemic levels since the crash, and the migrant worker population has not grown at all since the COVID-19 pandemic. Record numbers of young people are now opting to pursue postgraduate education or civil service roles rather than entering the open job market, masking the true scale of weak labor demand.

Even official GDP data contradicts claims that China avoided any quarterly contraction. China typically reports growth on a year-over-year basis, unlike the quarterly sequential reporting used in the U.S. and most other major economies. Official figures show that China’s economy contracted by 0.8% quarter-over-quarter in the second quarter of 2022, equal to an annualized contraction of more than 3% — a figure that was originally reported as a much steeper 9.3% contraction before being revised downward. Even official data confirms that current trend growth is roughly 2 percentage points lower than it was immediately before the pandemic.

Numerous independent analyses suggest that even the revised official figures overstate growth, due to a long-standing practice of “smoothing” GDP numbers: official statistics understate growth in strong years and overstate it in weak years to present a more stable picture of economic performance. A 2016 academic study found that this practice has resulted in official data overstating actual growth by a substantial margin since 2002. Following the 2021 property crash, multiple independent research groups have reached similar conclusions.

The Rhodium Group, a leading independent research firm focused on China, used alternative data sources to estimate that China’s economy actually contracted between 0.3% and 0.8% in 2022, compared to the official 3% growth figure, and grew only 1.5% to 2% in 2023, far below the official 5.2% reported. The Bank of Finland found that growth effectively stalled in 2022, and Capital Economics concluded that China did experience a full recession that year, even though growth has picked up moderately since. Adding to evidence of weak demand, China has slipped into deflation, with consumer prices falling into negative territory — a classic indicator of insufficient aggregate demand in a slowing economy.

It is important to acknowledge that China’s credit-based stabilization policy represents a meaningful innovation in macroeconomic management that merits further study from policymakers around the world. Beijing succeeded in preventing the property crash from spiraling into a total financial collapse, a feat that many analysts once considered unlikely. Even so, triumphal claims that China has eliminated the business cycle and avoided any recessionary pain from the property bust do not hold up to scrutiny. Long-term productivity costs remain a major risk, and even in the short term, the downturn has been far deeper than official figures suggest. If China remains on a trajectory of permanently lower trend growth, the practice of smoothing official growth numbers will eventually become unsustainable, as there will not be enough strong growth in good years to offset the inflated numbers reported during downturns.

A recent court ruling in eastern China has placed intellectual property protection in the global spotlight after popular domestic tea chain Molly Tea was found guilty of trademark infringement against French luxury giant Louis Vuitton, ordering the beverage brand to pay 10.3 million yuan (equivalent to £1.1 million or $1.5 million) in compensatory damages.

According to state-owned Chinese newspaper China Daily, the Suzhou City Intermediate People’s Court in Jiangsu Province handed down the verdict, which also requires the Shenzhen-headquartered Molly Tea to immediately cease all use of the infringing four-petal flower logo and issue a formal public apology to Louis Vuitton. The outlet further confirmed that Molly Tea and its associated enterprises had previously submitted multiple trademark applications to the China National Intellectual Property Administration, most of which were rejected. Only the textual trademark containing the Chinese characters for “Molly Tea” was ultimately approved for registration.

The ruling quickly went viral across Chinese social media platforms, splitting public opinion and generating heated nationwide discussion. As of this reporting, a hashtag tied to the case has accumulated over 400 million views and tens of thousands of public comments, with neither side backing down from their positions.

Many social media users have voiced support for Molly Tea, pushing back against the court’s conclusion. Critics of the verdict argue that simple four-petal floral geometric patterns have been a common design element across global cultures for centuries, long before Louis Vuitton registered its trademark. Others have pointed to a history of Western luxury brands drawing inspiration from traditional Chinese art and cultural artifacts without formal licensing or credit, noting that many historical patterns originating in China were never formally patented by their creators. One Weibo user publicly pledged to “drink a cup of Molly Tea daily” as an act of solidarity with the brand, while another commentator on Chinese social platform RedNote echoed the sentiment that basic geometric shapes cannot be claimed as exclusive intellectual property by any single brand.

On the opposing side, many online commentators have backed the court’s ruling and Louis Vuitton’s legal action. Supporters of the verdict emphasize that trademark law is clear: Louis Vuitton’s four-petal monogram was formally registered and legally protected, regardless of the historical origins of floral patterns. Many argue that all brands, domestic or international, are required to respect established intellectual property rights, and that imitation cannot be justified regardless of industry differences between a luxury fashion house and a domestic tea chain. One Weibo user noted that critics of the ruling should familiarize themselves with Chinese intellectual property law first, arguing that the legal standing of Louis Vuitton’s claim is unambiguous.

The BBC has reached out to both Molly Tea and Louis Vuitton for official statements responding to the verdict and subsequent public discussion, but no comments have been released as of this update. The case has reignited broader conversations in China about intellectual property protection, the balance between global IP standards and cultural design legacy, and the growing frequency of legal disputes between international luxury brands and domestic Chinese consumer companies.

Early this year, Vietnamese law enforcement carried out a dramatic raid on two unassuming warehouses on the outskirts of Ho Chi Minh City. Inside, they uncovered more than 23,000 pairs of counterfeit slippers emblazoned with the registered logos of global brands including Nike, Adidas, Crocs, and Gucci – products that the legitimate brands had never authorized for production or distribution in the facilities. The seized goods carried an estimated street value of VND 2 billion, equal to roughly $76,000 USD, marking one of the first major busts in a sweeping new national campaign against the country’s booming counterfeit trade.

Thirty kilometers away, in a crowded tourist flea market in central Ho Chi Minh City, near-identical counterfeit slippers – knockoffs of designs that retail for up to $900 in international markets – are openly displayed for $57 per pair. They sit alongside racks full of other fake luxury goods: imitation Chanel handbags, counterfeit Prada t-shirts, and replica Rolex watches, all part of an industry that has turned Vietnam into one of the world’s most well-known hubs for cheap designer knockoffs, operating openly for decades. Now, facing growing international pressure and the threat of punitive trade measures, Vietnamese authorities have launched an aggressive nationwide crusade to reverse the country’s reputation as a counterfeit capital.

On May 7, the Vietnamese government officially rolled out a nationwide crackdown on intellectual property rights violations, encompassing counterfeit physical goods, online piracy, and trademark infringement. While periodic public raids on counterfeit vendors have long been a standard part of local enforcement efforts, the current campaign marks a sharp escalation in activity. The driving force behind this intensified crackdown comes from international pressure, most notably from the United States, which has placed Vietnam at the top of its list of global IP violators.

In April, the Office of the United States Trade Representative designated Vietnam as a “priority foreign country” for its “persistent failure to resolve long-standing concerns about IP protection and enforcement” – the first time any country has received this harsh designation in 13 years. The U.S. also labeled Vietnam the world’s worst offender for intellectual property rights violations, opening the door to steep new tariffs on Vietnamese exports. Facing this economic threat, Vietnamese authorities pledged to increase the number of IP violation busts by at least 20% in May compared to the same period a year earlier.

One of the main targets of the campaign has been Saigon Square – the popular street market where pseudonymous vendor Thanh Truc sells replica clothing – and the adjacent Ben Thanh Market, two sprawling bazaars long known as Vietnam’s largest centralized hubs for counterfeit goods. In mid-May, a series of surprise inspections led to the confiscation of thousands of fake goods and total fines of more than $19,000. But many local vendors, who have adapted to decades of periodic enforcement, remain unfazed. Thanh Truc, who recently sold a replica Loewe t-shirt (retailing for $500 authentic) for just $17, explained that vendors have long established warning systems: “Usually, before inspectors arrive, someone here blows a whistle to warn everyone. Some stores display fewer logo-branded items now, but they still keep full stock in the back. Business is still continuing.”

Vietnam’s counterfeit supply chain is deeply entrenched, linked closely to manufacturing networks across its northern border in China, where most counterfeit goods are produced. Vietnamese wholesalers import bulk shipments of popular counterfeit designs and distribute them to small street vendors across the country. Vietnam’s position as a manufacturing hub for authentic global luxury brands also strengthens the black market: pre-cut materials, skilled labor, and manufacturing expertise meant for legitimate goods often leak into counterfeit production networks, creating a shadow industry that has proven extremely difficult to shut down entirely.

Despite these challenges, the Vietnamese government has framed its recent crackdown as a major success, reporting more than 1,400 IP infringement cases processed in the final three weeks of May alone. The U.S., however, has continued to ramp up pressure, launching a formal investigation in late May to determine whether Vietnam’s failure to eliminate IP violations qualifies as “unreasonable” trade practice that harms U.S. commercial interests. In response, Vietnamese authorities have expanded their raids beyond major tourist markets, targeting manufacturing and distribution rings across the country. On June 10, police in Thanh Hoa province dismantled a large counterfeit jewelry ring that produced more than 10,000 fake pieces imitating brands including Bvlgari, Cartier, Louis Vuitton, and Tiffany & Co., generating an estimated $1.14 million in illicit profits.

The crackdown has split public opinion in Vietnam, creating winners and losers across the retail sector. For independent local designers like Huong Thi Nguyen, who sells custom-made clothing through her own stores in Ho Chi Minh City and Da Lat, the crackdown is a long-overdue correction for a market that has devalued legitimate local craftsmanship. “The counterfeit industry makes Vietnam’s retail market chaotic and turns it into something of a joke,” she explained. “Customers will pay $75 for a fake designer dress that looks real, but complain when they are charged $37 for a custom piece made with high-quality fabric and expert tailoring. Vietnam has no shortage of highly skilled tailors and hand embroiderers, but many are overlooked, and many end up working in factories producing counterfeit goods.” Now, as counterfeit sellers are forced out of business, Huong plans to expand her business and raise her prices, saying: “I feel more confident operating in a business environment that is cleaner, more transparent, and fairer. This isn’t about winners and losers. It’s about restoring fairness.”

For low-income consumers and casual buyers, however, the crackdown threatens to eliminate an accessible option that fits within their limited budgets. Huy, an office worker in Da Nang and a regular buyer of counterfeit athletic clothing and footwear, says: “Arresting the vendors does not solve the problem. If I can still buy fakes easily, I will keep my old habits.” His perspective is shared by many Vietnamese consumers: with 60% of the population living in rural areas and an average monthly income of just $225, authentic luxury goods are completely out of reach for most of the country.

Thi Thanh Huong Tran, an associate professor at SKEMA Business School and a specialist in ethical consumption who grew up in Vietnam, notes that the counterfeit market is fundamentally underpinned by these economic realities. “Even though people know it’s fake, in a context where they don’t have the money to afford the real thing, for them it’s the most suitable option they have,” she said. She also argues that the economic harm to global luxury brands is minimal, since there is almost no overlap between counterfeit buyers and authentic luxury consumers: “Even without the counterfeit products, the low-income customer will never buy the authentic brand anyway, because they cannot afford it. They cannot see why they have to pay hundreds of dollars just for a bag.”

Counterfeit goods are also a major draw for international tourists, who make up a large share of customers at most major fake markets in the country. Many analysts, including Thi Thanh Huong Tran, argue that the Vietnamese government has very little chance of fully eradicating the counterfeit trade, because sellers have already developed countless workarounds to evade IP enforcement. Common tactics include making minor adjustments to brand names and designs – changing “Nike” to “Mike”, for example – that stay just inside the letter of the law while retaining the recognizable look and feel of the original brand. “Whatever regulation or actions the government takes, sellers will find a way to go around it and continue,” Thi Thanh Huong Tran explained. “The demand of the customers is always there. And if there is demand, of course, there will be sellers.”

Amid the United Kingdom’s ongoing search for pathways to sustainable, inclusive economic expansion, a new analysis from leading British think tank Equi has uncovered under-tapped potential in the country’s fast-growing Islamic finance sector, which the research values at an estimated £6 billion and projects could deliver up to £2.5 billion in annual economic benefits for the UK if supported by targeted policy action.

Islamic finance, a framework of financial activities aligned with Islamic moral and legal principles, centers on two core rules: a total ban on interest-based transactions, and prohibitions on investment in sectors deemed unethical, including gambling, alcohol, adult entertainment, and arms manufacturing. Beyond its faith-based foundations, the new report highlights that the sector already occupies a dominant position in Europe, controlling no less than 85% of all regional Islamic finance assets — a standing built largely on longstanding investment ties with Gulf nations.

The research notes that Islamic finance channels have already facilitated billions in Gulf investment into high-profile UK infrastructure and real estate projects, including iconic London landmarks such as the Shard and the redeveloped Battersea Power Station. Islamic banks have also played a key role in directing foreign capital from Gulf investors into UK residential construction, as London remains one of the most attractive global destinations for cross-border real estate investment. Currently, all five fully licensed Islamic banks operating in the UK count Gulf-based shareholders and primarily serve high-net-worth clients from the region, but emerging data shows a rapidly expanding domestic market that is shifting this dynamic.

Between 2020 and 2025, the number of retail Islamic banking customers in the UK grew at an annual rate of 20%, signaling strong untapped domestic demand that extends far beyond Britain’s Muslim community. The report’s consumer surveys bear this out: 64% of British Muslims report preferring Islamic finance products to conventional alternatives, and just over half currently hold an active Islamic bank account. More surprisingly, 30% of non-Muslim consumers said they would be willing to switch to Shariah-compliant financial products if services matched the quality and accessibility of conventional offerings. This trend is not new: in 2013, 87% of customers who opened fixed-term deposit accounts at Al Rayan, one of the UK’s largest Islamic banks, were non-Muslim.

The report also finds that demand from British Muslim consumers is a major driver of growth in ethical and green finance across the UK. Seventy-two percent of British Muslims report awareness of green finance products, compared to just 42% of non-Muslims, and Muslim consumers are 20% more likely to actively use green financial instruments than their non-Muslim counterparts.

Despite these promising metrics, the research identifies key structural barriers that are holding the sector back from reaching its full potential. The current focus on serving wealthy Gulf clients means banks are not leveraging the sector’s full capacity to drive broad-based economic growth across the UK, the report argues. Additionally, British Muslim communities and organizations face widespread financial exclusion: an alarming 42% of British Muslim charitable organizations have reported having their bank accounts abruptly withdrawn without explanation, a practice known as debanking. The report also points out that faith-related financial access is not mentioned at all in the UK’s national Financial Inclusion Strategy, a gap the authors call a “significant oversight.”

To unlock the sector’s full economic value, Equi’s report makes two key policy recommendations to the UK government. First, it calls for the establishment of a dedicated, bespoke Islamic Finance Unit, which would coordinate cross-government efforts to support sector growth, expand access to Shariah-compliant products, and ensure the industry contributes to national goals of broad-based economic growth and improved financial inclusion. Second, the report advocates for launching a sovereign Sukuk (Shariah-compliant bond) program, with specific issuances earmarked for sustainable infrastructure projects to strengthen the UK’s global standing in Islamic finance and help the country meet its legally binding net-zero carbon commitments.

Naz Shah, Labour Member of Parliament and chair of the All-Party Parliamentary Group on Islamic and Ethical Finance, backed the report’s findings, noting that as policymakers prioritize driving sustainable growth, raising productivity, and expanding economic opportunity, the research makes a strong case for re-framing Islamic finance. Instead of being treated as a niche, marginal offering, Shah said, it should be recognized as a significant, underutilized asset for the UK’s long-term economic future.

Javed Khan, managing director of Equi, emphasized that Islamic finance represents a major, overlooked economic opportunity for the UK at a time of sluggish growth. “At a time when the UK is searching for sustainable growth, this is about unlocking billions in investment, supporting innovation and ensuring our financial system works for everyone,” Khan said. He added that with the right policy support, the UK has the opportunity to solidify its position as the global capital of Islamic finance, driving economic growth, boosting productivity, and reinforcing the country’s standing as a world-leading international financial center.

China’s residential real estate market has extended its downward trajectory through the first half of 2026, held back by widespread buyer hesitation that stems from widespread expectations of further price declines. With both transaction volumes and average values continuing to drop, market analysts see almost no evidence that a near-term turnaround is on the horizon.

New data published Wednesday by the China Index Academy offers a clear snapshot of the current downturn: across 100 major Chinese cities, secondary-market residential prices fell 0.42% month-over-month in June, pushing the national average to 12,639 yuan (approximately US$1,750) per square meter. Price drops were far more common than gains, with 88 of the 100 tracked cities recording lower values and just 12 seeing minor increases.

The slump in the resale market cuts across all city tiers. Year-over-year data for June shows first-tier city prices fell by 6.95%, while second-tier centers fared worse with an 8.21% annual drop. Smaller third- and fourth-tier cities, which have shouldered heavy oversupply for years, recorded a 7.48% year-over-year decline.

Among China’s 10 largest cities, Nanjing and Wuhan saw the steepest annual drops, with resale prices falling 11.45% and 10.89% respectively. Beijing, Tianjin, Guangzhou and Chongqing all recorded declines between 8% and 10%, while Hangzhou, Shanghai, Chengdu and Shenzhen saw drops ranging from 5% to 8%. Shenzhen outperformed its peer major cities, posting the smallest annual decline at 5.27%.

Market commentators across China broadly agree that first-half data confirms the downward trend has not yet hit bottom, with most predicting further price drops through the second half of 2026. One Henan-based columnist, writing under the pen name Qingjin Wenwang, highlighted the stark shift in negotiating power between sellers and potential buyers over just a few months.

“A friend of mine began house-hunting for marriage in late 2025. Back then, sellers were confident and refused to budge on asking prices,” he shared. “By June 2026, when he returned to the same district to view comparable properties, most sellers had softened their stance and were constantly pressing him to sign a deal as soon as possible.”

Even with more flexible sellers, the columnist noted that the experience left his friend more cautious than ever: the visible shift in market conditions only reinforced his fear that prices would continue to fall even after he completed a purchase, leaving him with an underwater asset.

Citing earlier data from the National Bureau of Statistics (NBS), Qingjin Wenwang outlined four core factors that continue to block a sustainable market recovery: First, prices have not yet stabilized: in May, only 16 out of 70 major cities recorded month-over-month new home price gains, and just 10 saw resale price increases, with declines accelerating in smaller third-tier markets. Second, buyer demand remains muted: new home sales dropped 10.8% year-over-year by floor area and 13.5% by value through the first five months of 2026, with millions of households delaying purchases indefinitely. Third, developer activity continues to contract: real estate investment fell 16.2% year-over-year between January and May, new construction starts dropped 22.6%, and project completions declined 23.4%. Fourth, confidence in the resale market has deteriorated sharply, with market price benchmarks shifting lower across most cities, and cautious buyer psychology takes significant time to reverse once it sets in.

Official NBS data from June 16 reinforces this grim outlook: across 70 major cities, only four recorded year-over-year new home price increases in the first five months of 2026. No city recorded year-over-year resale price gains over the same period, with most cities seeing annual declines between 5% and 8%.

A Guangdong-based property columnist noted in a Wednesday analysis that China’s property market has undergone a dramatic structural shift since 2021, when new home sales peaked at 1.79 billion square meters. Sales have declined every year since that peak, falling below 1 billion square meters in 2025. In dozens of cities across the country, prices have fallen more than 40% from their 2021 peak, with some markets dropping more than 50% – a contraction that qualifies as severe by any global standard, he emphasized.

He outlined three long-term structural drivers behind the ongoing downturn that cannot be addressed with short-term stimulus: first, China’s population entered negative growth in 2022 and has continued to shrink, a trend that international experience shows is extremely difficult to reverse, and one that will keep long-term housing demand muted. Second, the era of rapid urbanization that drove decades of explosive housing demand has largely drawn to a close, after decades of mass rural-to-urban migration pushed prices steadily higher. Third, after decades of rapid construction, overall national housing supply is no longer scarce, with only a small number of major cities and prime urban districts facing tight supply.

In late April, a wave of viral online commentary drew widespread public attention to a startling trend: after adjusting for inflation and currency depreciation, four years of continuous declines have pushed inflation-adjusted national home prices back to levels last seen around 2006. The claims drew on data compiled by the Bank for International Settlements (BIS) and sparked fierce debate across Chinese social media about the true health of the property sector.

The Federal Reserve Bank of St. Louis visualized BIS data to track China’s home prices against a 2010 baseline index of 100. A first chart tracking nominal residential prices shows China’s index climbing from 78 in 2006 to a peak of 145.9 in 2021, before sliding back to 114 in the first quarter of 2026. When adjusted for inflation and currency depreciation, however, the picture is far more stark: the index rose from 88.5 in 2006 to a peak of 113 in 2021, then fell to 85.1 in Q1 2026, putting real home prices lower than they were two decades ago.

This adjustment works the same way as the distinction between nominal and real GDP growth: stripping out the impact of price changes to show the actual change in asset value.

Not all analysts agree that the national average data applies uniformly across the country. Jiangsu-based commentator Duanwei Liwen pointed out that top-tier markets remain far more resilient than smaller urban centers. “Home prices in Beijing, Shanghai and Shenzhen are still extremely high, and there is no sign they have returned to 2006 levels,” she noted. “You cannot use a single national average to describe the situation in every Chinese city.”

Duanwei added that while first-tier cities have held their value far better, most of the downward pressure is concentrated in third- and fourth-tier cities, where real prices have indeed fallen back to levels not seen in a decade or more. She emphasized that the real value of the BIS data is as a warning to buyers who try to time the market and bet that prices have hit bottom.

“Over the past few years, many people have already fallen into this trap,” she said. “They see a small price pullback and assume the floor has been reached, or they see a minor policy easing and conclude a rebound is coming. Then prices keep falling, and they are stuck with assets they cannot sell.”

A writer for Beijing-based financial outlet Sina Finance pushed back on the inflation-adjusted framing, arguing that nominal prices are far more relevant for most household buyers, since household incomes and everyday living costs are not adjusted for inflation. Using the BIS nominal price index, he noted, it is undeniable that national average prices have returned to 2016 levels.

Any reliable forecast for future price trends, he added, must weigh a full range of interconnected factors, including demographic shifts, rental yields, income inequality, and the evolving balance between housing supply and buyer demand.

Against a backdrop of a ballooning bilateral trade deficit and shifting global trade dynamics, China and the European Union have formalized a new framework for regular high-level trade engagement, agreeing to hold ministerial-level trade negotiations one to two times annually to grow and rebalance their commercial relationship, China’s Ministry of Commerce confirmed Thursday.

The announcement follows a Monday meeting in Brussels between EU Trade Commissioner Maroš Šefčovič and Chinese Commerce Minister Wang Wentao, where Beijing extended a formal invitation for Šefčovič to visit China in autumn 2024, confirmed ministry spokesperson He Yadong to reporters. Under the newly launched China-EU Trade and Investment Consultation Mechanism, the two partners have also outlined plans to deepen collaborative work in two high-priority global sectors: artificial intelligence development and the global transition to renewable energy.

The new consultation structure comes as the EU faces mounting domestic and international pressure to address its growing trade imbalance with China. Last year alone, the EU’s trade deficit with China expanded to roughly €360 billion ($410 billion), averaging nearly €1 billion per day. The surge in Chinese exports of electric vehicles and energy storage batteries to European markets has been a key driver of this widening gap, prompting increasing calls from European industry leaders for policy intervention.

In remarks after his Brussels meeting, Šefčovič emphasized that as the trade gap grows, the bloc is committed to protecting its domestic industrial base and advancing a fair global competitive landscape, setting an October deadline for achieving tangible progress on trade rebalancing. Tensions have already escalated in recent weeks: new EU trade rules targeting Chinese imports took effect Wednesday, designed to shield the European steel sector and impose stricter controls on low-value small parcels shipped via cross-border e-commerce.

Chinese stakeholders have pushed back on European trade restrictions, framing the imbalance as a product of EU policy choices. A post last week from Yuyuantantian, a social media account linked to Chinese state media, noted that China has signaled openness to increasing imports from the EU, but argued the bloc must ease its existing export controls on high-tech goods bound for China and stop framing trade and economic issues as geopolitical weapons.

The current standoff also unfolds against a broader global backdrop of shifting supply chain strategy. In June 2024, G7 leaders issued a joint communique committing to building resilient alternative supply chains for critical minerals — inputs central to high-tech manufacturing and national defense production — with the explicit goal of reducing collective reliance on Chinese supplies.