China 3-Year Property Slump; Korean Exports Slow Due to China

Chinese property developers facing 3-year slump as good times end

China's current property market downturn will probably last three years and eliminate a third of the players, the founder of a Hong Kong-listed mainland developer said yesterday.

His comments added fuel to an already heated debate about the industry's outlook given slowing growth in the world's second-largest economy.

"A problematic correction will probably take three years," said Tian Ming, chairman of Landsea, a green-tech developer based in Nanjing, Jiangsu province. He was the most pessimistic among six developers in a property forum panel in Hong Kong. "I am an honest man," he said.

......Developers, including Tian, foresee no collapse of the once bubbly real estate market, as policymakers still have many cards to play in the short term and the country's urbanisation push will support housing demand in the next decade. But they all realise the need to sharpen their competitiveness in a fierce market consolidation.

A summary of all Chinese developers listed onshore and offshore by E-House showed they were ill prepared financially, with their leverage hovering at historically high levels.

S Korea exports fall on China slowdown and holidays in May

Exports to China slipped 9 per cent from a year before, setting the fastest drop in nearly five years and eclipsing a stellar 32 per cent jump in sales to the European Union and a 4.5 per cent rise in shipments to the US.

Analysts and the government called for caution over the export data for last month, pointing to distortions arising from unusually long holidays falling in May in Korea and China.

......In Korea, there were 1.5 fewer working days in May than a year earlier and this meant the average exports per working day in fact rose 6 per cent to US$2.23 billion, the second-best on record.

There were no extra holidays in China or South Korea in May. There was one extra weekend day as compared to 2013.

Beijing prodded to act on growth amid risk of further slowdown

The risk of a further slowdown in China's economy has prompted the most active flurry of policy-easing measures since 2012, signalling Beijing's determination to prevent growth from slipping below 7 per cent.

Already, a marked turnaround in business and consumer sentiment during May displays a belief that the government will not allow significant further deterioration in economic growth, which slipped below the official 7.5 per cent target in the first quarter to an 18-month low of 7.4 per cent, though analysts say some gauges, such as power output, remained weak.

However, consumer sentiment showed a strong bounce from a low in March, the Westpac MNI survey found last week.

......Stephen Green, head of Greater China research at Standard Chartered Bank, told the South China Morning Post: "I think as evidence of a broader slowdown becomes clearer, they'll need to do more. But they'll take their time.

"Without evidence of a jobs crisis or systemic financial risks breaking out, they will continue on this gradual path."

Green warned that there is a risk that the fresh liquidity will be channelled to undesirable areas, such as the property market.

It's not a risk, it's all but a guarantee, which is why there's been nothing more than mini stimulus efforts thus far.