China's growth model under strain, but stimulus faces high hurdles

Real estate slump, local fiscal woes and weak yuan put Beijing in a bind

20230816N Shanghai building under construction

Purchasers of apartments at this unfinished condominium complex in Shanghai have threatened to boycott mortgage payments. (Photo by Noriyuki Doi)

NORIYUKI DOI, Nikkei staff writer

August 17, 2023 04:33 JST

SHANGHAI -- China's depressed property market is undermining the country's economic growth model, but strained local government finances and a weak yuan have made authorities hesitant to embark on the massive stimulus used after the global financial crisis.

Near Shanghai's Lujiazui financial district, homebuyers last month threatened not to pay mortgages on apartments that remain unfinished past their scheduled delivery date. The condominium project's troubled developer has been unable to pay for construction.