The Delta variant has hit China’s economy hard. Now a property crunch is looming

China’s dramatic steps to contain the coronavirus this summer have taken a toll on consumer confidence in the country and are fueling concerns about the strength of the world’s second largest economy.

Retail sales struggled in August, increasing just 2.5% compared to a year earlier, according to government statistics released Wednesday. That was much weaker than expected and a dramatic slowdown from the 8.5% uptick recorded in July.

Chinese authorities attributed the slower growth to Covid-19 outbreaks and flooding, which stopped people from traveling and caused them to hold off on “summer holiday spending,” according to Fu Linghui, a spokesman for the National Bureau of Statistics, who spoke Wednesday at a press conference in Beijing.

Industrial production rose 5.3% in August from a year earlier, also slower than July and the weakest growth generated by China’s factories in a year.

Investment in urban areas, meanwhile, increased 8.9% for the January-to-August period, down from 10.3% through the first seven months of the year.

The data released Wednesday is the most stark showing yet of how much the actions that the government took to slow an outbreak of the Delta variant this summer have hit the economy. To stop new infections China has pursued an aggressive zero-Covid strategy, locking down cities, canceling flights and suspending some port operations.

The approach worked to bring the virus back under control, albeit at the expense of economic activity.

But the Chinese economy has other concerns to contend with, too, including a crunch facing the property sector.

New housing projects, as measured by floor space, fell 3.2% during the first eight months of the year.

“The headwinds facing the property sector appear to be intensifying,” wrote Julian Evans-Pritchard, senior China economist for Capital Economics, in a research report on Wednesday. He added that the government’s restrictions on borrowing among property developers are putting strain on the sector.

Recently, Chinese property giant Evergrande’s cash crisis has significantly worsened, and the company has warned that it could default on its huge debts as it struggles to cut costs or find buyers for some of its assets.

The company, one of China’s largest real estate developers, has already triggered market turmoil in the country as its bonds and stocks have plunged. Investors worry that a default could have ripple effects for China’s banking system and the wider economy, as well as spark social unrest. Already, investors and the company’s own employees have reportedly been protesting at Evergrande’s headquarters in Shenzhen, as well as in Sichuan, Jilin and Henan provinces.

The coronavirus, meanwhile, may continue to vex the economy. A new outbreak in southeastern Fujian province “is posing a downside risk to our forecast of a pickup in growth” in the fourth quarter, after a weak third quarter, wrote Louis Kuijs, head of Asia economics for Oxford Economics, in a Wednesday research report.

He added that he expects “the tight stance on financing to property developers to remain and the regulatory tightening on internet companies to weigh on sentiment and growth,” referring to the ongoing government crackdown on big tech firms.

But Kuijs added that the Chinese government will likely be keen to avoid a sharp slowdown. He expected authorities to support growth in the coming months by cutting interest rates and allowing local governments to issue more bonds to fund infrastructure projects.

The-CNN-Wire
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Disneyland Figures Out a New to Make More Money

Disneyland Figures Out a New to Make More Money


AP Photo/Jae C. Hong


(CNN Business) – Millions of guests visit Disney theme parks each year, and most of them probably loathe waiting 90 minutes to ride “Peter Pan’s Flight.” So now Disney is rolling out a new service that will help park goers streamline their visits and cut down on wait times.

Genie” — which debuts this fall at California’s Disneyland and Florida’s Disney World — is a new digital service that will “maximize your park time, so you can have more fun,” according to the company.

“From specific attractions, foodie experiences and entertainment, to general interests like Disney princesses, villains, Pixar, Star Wars, thrill rides and more — just tell Disney Genie what you want to do and it will do the planning for you,” Disney (DIS) said in a blog post on Wednesday.

Disney Parks Chairman Josh D’Amaro told CNN Business this week that the company listened to guests who want the theme park experience to be simpler, straightforward and tailored “for them.”

“You tell Genie what you are interested in specifically — whether that be an attraction, a food, a character — and Genie’s going to come back to you and tell you how to make the most of your day,” D’Amaro said.

The free service will be built into Disney Parks’ established apps along with a paid version called “Disney Genie+” that allows guests to access the “Lightning Lane” for $15 at Disney World and $20 at Disneyland.

“Lightning Lane” is basically a paid version of a benefit that used to be free for guests: Disney’s FastPass, which allowed visitors to book ride and attraction times in advance to avoid long waits.

As Disneyland retires the Fastpass and unveils their new pay-for Genie+ service to manage lines/crowds, Nikki Medoro and Bret Burkhart wonder if people will actually pay more to avoid lines. Also, Brett Favre says kids should avoid tackle football before age 14.