Because the economy is growing at the slowest pace since China’s first outbreak, Premier Li Keqiang said the country may miss its 5.5 per cent growth target this year. Youth unemployment reached a record high of 19.3 per cent in June, while factory activity contracted in July.
PRICED OUT OF HOMES
For the 400-million-strong Chinese middle class however, their malaise does not stop at COVID-19-related uncertainties.
In 21st-century China, two things have long been markers of the much-vaunted middle-class status: Home ownership and professional jobs. Both are often perceived as pre-requisites for marriage.
More importantly, they are part of the implicit social contract between the Chinese Communist Party and the broader population. In return for acquiescence to the Party’s rule, the middle class is promised an abundance of personal and economic opportunities, such as climbing the housing ladder and attaining a well-paid job.
Today, they can no longer be taken for granted. Even before the coronavirus outbreak, young prospective homeowners had increasingly been priced out of the housing market in big cities.
According to a government survey, in megacities like Beijing, Shanghai and Shenzhen, the housing-price-to-income ratio was above 35 – meaning that the price of an average house is equivalent to roughly 35 years of the average household income.
The ongoing real estate downturn that has seen defaulted developers and stalled housing projects across the country only made things more dire. Strict COVID-19 policies have also dampened the appetite to purchase properties. Analysts forecast that property sales will plunge by 30 per cent this year.
Source: Channel News Asia