Raphael Stevens

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    NASA delays crewed Artemis moon missions into 2025 as companies navigate challenges

    NASA is pushing back the schedule for upcoming missions of its flagship Artemis lunar program by about a year.
    The next Artemis mission, which will be the first to carry crew, is now targeting September 2025, NASA leadership announced on Tuesday.
    The Artemis program represents a series of missions with escalating goals, aiming to return astronauts to the lunar surface for the first time since the Apollo era.

    The crew members of the Artemis 2 mission of the U.S. space agency NASA, left to right, Reid Wiseman Victor Glover, Christina Koch and Jeremy Hansen, stand at a press event in the ArianeGroup building.
    Hauke-Christian Dittrich | Picture Alliance | Getty Images

    NASA is pushing back the schedule for upcoming missions of its flagship Artemis lunar program by about a year as the agency’s contractors work to finish technology needed to return U.S. astronauts to the moon’s surface.
    “We are adjusting our schedule to target Artemis 2 for September of 2025 and September of 2026 for Artemis 3, which will send humans for the first time to the lunar south pole,” NASA Administrator Bill Nelson said during a press briefing on Tuesday.

    Artemis 2 — with a four-person crew, which NASA announced last spring — was previously planned to launch in November, while Artemis 3 had been targeting December 2025.
    The pair of missions are set to follow the uncrewed Artemis I mission that flew in 2022. The Artemis program represents a series of missions with escalating goals, aiming to return astronauts to the lunar surface for the first time since the Apollo era.

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    Nelson’s comments confirm reporting by CNN and Reuters that NASA would be pushing out the schedule for the program. Delays to Artemis have long appeared likely, especially after NASA’s Inspector General detailed challenges with crucial infrastructure of the program in a report late last year.
    Artemis relies on a variety of vehicles and equipment built by companies including Boeing, Northrop Grumman, Lockheed Martin, Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin. Axiom Space and RTX’s Collins Aerospace are also developing lunar spacesuits to support the program.
    But many of those companies still face obstacles, whether with development or technology setbacks, such as problematic batteries in Lockheed’s Orion capsule and issues demonstrating in-space refueling with SpaceX’s Starship. Already, NASA’s Artemis effort has been delayed for years, with the program running billions over budget.

    NASA has spent more than $42 billion since 2012 to develop and build the systems behind the Artemis program, with the agency’s Inspector General noting that the initial missions will cost $4.2 billion per launch.

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    Xi Jinping risks setting off another trade war

    China’s leaders are obsessed with lithium-ion batteries, electric cars and solar panels. These sorts of technologies will, Xi Jinping has proclaimed, become “pillars of the economy”. His government is spending big to ensure this happens—meaning, in the years to come, that his ambitions will be felt across the world. A manufacturing export boom could very well lead to a trade war.image: The EconomistMr Xi’s manufacturing obsession is explained by the need to offset China’s property slump, which is dragging on economic growth. Sales by the country’s 100 largest real-estate developers fell by 17% in 2023, and overall investment in residential buildings dropped by 8%. After a decade in which capital spending in property outstripped economic growth, officials now hope that manufacturing can pick up the slack. State-owned banks—corporate China’s main source of financing—are funnelling cash to industrial firms. In return for an extension of pandemic-era tax breaks and carve-outs for green industries, exporters in powerhouse provinces have been told to expand production. During the first 11 months of 2023 capital spending on smelting metals, manufacturing vehicles and making electrical equipment rose by 10%, 18% and 34%, respectively.Such developments will be prompting flashbacks among veteran Western policymakers. China’s rise was accompanied by an epochal shift in global trade. In the decade that followed the country’s accession to the World Trade Organisation in 2001, its exports rose by more than 460%. China became the number-one target for accusations of dumping—selling goods abroad at lower prices than at home—in industries including chemicals, metals and textiles. Although low-cost goods were great news for consumers, they were less welcome for some rich-world industrial workers. It later became fashionable to blame the “China shock”, which led to lay-offs in affected industrial areas, for contributing to Donald Trump’s electoral victory in 2016.image: The EconomistThe coming manufacturing boom could be even larger, given the sheer scale of the Chinese economy, which has doubled in size over the past decade. Michael Pettis of Peking University notes that even if China simply were to maintain the current size of its manufacturing sector, which counts for 28% of GDP, and were to achieve its target of 4-5% gdp growth over the next decade, its share of global manufacturing output would rise from 31% to 36%. If Mr Xi’s ambitions are fulfilled, the rise will be even more significant.China’s capital investment, which is more than double America’s as a share of GDP, is funded by its thrifty households and their saving piles. During earlier manufacturing booms, some observers had expected the country’s domestic consumers to use these savings to splurge on goods, only to be proved wrong. Consumers are likely to continue to prefer saving to spending. In 2023 private consumption rose by 10%, rebounding from a grim 2022. But most analysts now expect markedly slower overall growth in the year to come, owing to tumult in the property market and the government’s wariness about borrowing to support household incomes. In the absence of higher private consumption, “policymakers would need to bring the economy down much faster to correct overcapacity”, says Alicia Garcia-Herrero of Natixis, a bank. “It would have to grow at 3-4%, not 5%”. Alternatively, if the higher rate of growth is to be sustained, more goods will have to be sold abroad.It will help that they are getting cheaper—as can be seen in the steel market, which is vital for China’s car and renewable industries. Early last year investors expected output to fall, as Chinese construction flagged. Instead, in a remarkable feat, the country’s steel giants produced more metal even as the property industry suffered. Steel mills, which have access to cheap capital, are willing to take considerable losses in order to preserve market share.As a result, industrial prices fell by 2% in the first 11 months of 2023, and profits by 4%. An employee at a supplier in Shanghai estimates that producers are losing about 350 yuan ($50) on each tonne of steel reinforcement they sell. In 2012, during a previous era of manufacturing stimulus, overcapacity meant that the profit on a couple of tonnes of steel “was just about enough to buy a lollipop”, according to Yu Yongding, an economist. Producers are now heading for a similar situation. Meanwhile, renewable firms, such as LONGi, the world’s largest solar-equipment manufacturer, and Goldwind, a wind-turbine maker, are also suffering. Both reported sharply lower profits in the third quarter of 2023.It is not only China’s industrial prices that are falling—the country’s currency is, too. The yuan is down by 9% on a trade-weighted basis since its peak in 2022, meaning that overseas competitors face a double whammy. At the same time, Western politicians are more willing to fight on behalf of domestic firms than during the last era of Chinese manufacturing stimulus. Attitudes towards Chinese exports have hardened. Western countries are both more protective of their domestic industrial bases and more sceptical that China will eventually become a market economy.Frictions are already starting to develop. In November Britain launched a probe into Chinese excavators, after JCB, a local firm, alleged that Chinese rivals were flooding the market with cut-price machines. The eu is conducting an anti-subsidy probe into Chinese electric vehicles and an anti-dumping probe into Chinese biodiesel. The Biden administration has asked the eu to tax Chinese goods, offering to drop American tariffs on European steel in return. On January 5th China decided to hit Europe where it hurts, announcing an anti-dumping investigation into brandy.And it is not just the rich world that is getting angry. In September India imposed fresh anti-dumping duties on Chinese steel; in December it introduced new duties on industrial laser machines. Indeed, almost all the anti-dumping investigations that India’s trade authorities are now conducting concern China. On the other side of the world, Mexico is in a tricky spot. It benefits from decisions by Chinese companies to move production in order to avoid American tariffs, but it also wants to avoid domestic markets being flooded by subsidised imports. It seems the latter desire is now taking precedence. In December the government announced an 80% tariff on some imports of Chinese steel.China’s leadership has little room for manoeuvre. In December officials issued a statement calling industrial overcapacity, exacerbated by weak domestic demand, one of the biggest challenges facing the economy. Given the numerous other challenges facing the economy, they can hardly afford to alienate more of China’s trading partners with fights over dumping and subsidies. Unfortunately, the alternative—a new year with nothing to offset the property mess and lacklustre consumer spending—may be even less attractive. ■ More

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    Home prices are surging — and Detroit gained the most in November, beating Miami for the first time

    Home price gains are being fueled by a decline in mortgage rates.
    Home prices jumped 5.2% on an annual basis in November.
    Detroit saw the largest annual price gain, surpassing Miami.

    A “For Sale” sign hangs outside a home on the west side of Detroit, Michigan.
    Fabrizio Costantini | Bloomberg | Getty Images

    Home prices are rising faster and faster each month, fueled by a decline in mortgage rates.
    On a national level, home prices jumped 5.2% in November compared to the same month a year earlier, according to a new report from analytics firm CoreLogic. That’s up from a 4.7% annual gain in October.

    States in the Northeast led the gains, with Rhode Island (11.6%), Connecticut (10.6%) and New Jersey (10.5%) seeing the strongest growth. Areas seeing year-over-year price declines in November were Idaho (-1.3%); Utah (-0.4%); and Washington, D.C. (-0.2%).
    “This continued strength remains remarkable amid the nation’s affordability crunch but speaks to the pent-up demand that is driving home prices higher,” Selma Hepp, chief economist for CoreLogic, said in a release. “Markets where the prolonged inventory shortage has been exacerbated by the lack of new homes for sale recorded notable price gains over the course of 2023,” she added.
    The lower the mortgage rate, the greater the buying power for consumers. While prices are expected to soften slightly later next year, much of that will depend on supply. At current low supply levels and demand increasing due to lower mortgage rates, for now at least, prices have nowhere to go but up.
    After hitting more than a dozen record lows in the first two years of the Covid-19 pandemic, mortgage rates began rising sharply in 2022 and hit a more than 20-year high in October last year. The average rate on the 30-year fixed loan briefly crossed over 8%. It has since fallen back and is now in the high 6% range.

    Detroit topples Miami

    On the city level, Detroit saw the largest annual price gain at 8.7%, surpassing Miami, which came in at 8.3%, according to CoreLogic. Miami had held the top spot for 16 months.

    “Detroit lagged appreciation during the pandemic so some of this was a catch up,” said Hepp. “Other Mid-west areas [are] seeing stronger appreciation because they’re more affordable.”
    While the median price of a home in Detroit is still among the most affordable in the nation, the market is considered overvalued due to local income levels.
    Roughly 82% of the nation’s 397 metropolitan housing markets surveyed by CoreLogic were considered overvalued. That means Detroit’s home prices are overly high compared with local household incomes. Notably, large cities considered “normal” in valuation were Boston; Chicago; Los Angeles; and Washington, D.C.
    “It really depends on who is buying in the area, and we’ve seen more higher income folks buying in those areas,” Hepp said.Don’t miss these stories from CNBC PRO: More

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    NFL offers buyouts to more than 200 employees

    The National Football League offered voluntary buyouts to at least 200 employees.
    The league employs about 1,100 people. It wasn’t clear how many buyouts the NFL aims to achieve.
    The news comes as the NFL gears up for the playoffs, which begin this weekend.

    Nick Laham | Getty Images

    The National Football League offered voluntary buyouts to at least 200 employees as it gears up for start of the playoffs this coming weekend, according to a memo obtained by CNBC.
    The NFL, which has about 1,100 employees, told staff that it is “continuously evaluating ways to enhance efficiency and improve outcomes,” according to the memo.

    “Every organization is increasingly challenged to be agile, responsible and strategic. The NFL is no exception,” the memo says.
    The buyouts come when the league has shown financial strength, with revenue in 2022 hitting nearly $12 billion. Commissioner Roger Goodell has set a goal of reaching $25 billion in annual revenue by 2027. Teams are also valued at high levels. In July, NFL owners approved the sale of the Washington Commanders, a franchise that hasn’t won a Super Bowl in more than three decades, for a record $6 billion.
    The league sent the buyout memo to employees who qualified, which is dependent on their age and the number of years they worked in the league office, with the total number equal or exceeding 70. It wasn’t immediately clear how many buyouts the NFL is aiming for.
    The league offered eligible employees three weeks salary for every year served, in addition to bonuses. Staffers will have until the end of February to decide whether to take the buyout.
    The NFL said its strategy going forward includes international expansion, the growth of flag football, and the continued development of media and digital operations.

    “How we operate, where we invest our capital, and the workforce must evolve to align with these strategic priorities to best position the league for continued success,” the memo says.
    In May, the NFL Network laid off about 5% of its workforce.
    News of the buyouts was first reported by Sports Business Journal.
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    Clarification: This story was updated to clarify the NFL’s formula for offering the buyouts. More

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    U.S. lunar company’s inaugural mission falls short of moon landing after spacecraft malfunction

    Pittsburgh-based Astrobotic’s inaugural lunar mission suffered a malfunction shortly after launch, and the company is calling off the landing attempt.
    It would have been the first U.S. moon landing in more than 50 years.
    Both Astrobotic and NASA have cargo lunar landing attempts lined up, with three American companies scheduled to launch missions this year.

    Astrobotic’s Peregrine lunar lander is seen during preparations for launch near NASA’s Kennedy Space Center in Florida.
    United Launch Alliance

    Pittsburgh-based Astrobotic’s inaugural lunar mission suffered a malfunction shortly after launch, and the company is calling off the landing attempt.
    It would have been the first U.S. moon landing in more than 50 years.

    Astrobotic said late Monday that the goal for its Peregrine moon lander is now to get “as close to lunar distance as we can” before the spacecraft begins tumbling and loses power. The company suspects the malfunction was a failure within the spacecraft’s propulsion system, causing a leak that is quickly draining the vehicle of fuel.
    The company had aimed to make a moon landing attempt on Feb. 23, but in light of the propulsion problem has since been “maximizing the science and data we can capture,” the company said in a post on social media platform X.
    Astrobotic’s Peregrine is carrying 20 payloads for government and commercial customers, five of which are for NASA under a $108 million contract.

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    Peregrine was deployed successfully after launching on the inaugural flight of ULA’s Vulcan rocket early Monday morning, which made its long-awaited debut from Cape Canaveral, Florida.
    Hours after separating from the rocket, Astrobotic announced it was receiving data from the lander and that many of its systems were working as expected. However, after activating its propulsion system, Peregrine suffered an issue and began tumbling.

    United Launch Alliance’s Vulcan Centaur lifts off from Space Launch Complex 41d at Cape Canaveral Space Force Station in Cape Canaveral, Florida, on Jan. 8, 2024, for its maiden voyage, carrying Astrobotic’s Peregrine Lunar Lander.
    Gregg Newton | AFP | Getty Images

    Astrobotic spent the following hours improvising and was able to get the spacecraft’s solar arrays pointing toward the sun to charge Peregrine’s battery. But the propellant leak has since meant that Peregrine has only enough fuel to remain stable until Thursday.
    “We are using Peregrine’s existing power to perform as many payload and spacecraft operations as possible,” Astrobotic said.
    While Peregrine Mission One will not be the first American spacecraft to land on the moon since Apollo 17 in 1972, both the company and NASA have subsequent attempts lined up. Astrobotic’s inaugural flight is just the first of six launches of lunar landers from three different American companies slated for this year alone.
    The push falls under NASA’s Commercial Lunar Payload Services initiative, which aims to deliver science and cargo to the moon with increasing regularity in support of the agency’s Artemis crew program.
    Astrobotic has a second lunar mission funded already, with the company saying it has so far secured upward of $450 million in government and commercial contracts.
    “We are grateful for the outpouring of support we’re receiving — from messages on social media to phone calls and helping hands. This is what makes the space industry so special, that we unite in the face of adversity,” Astrobotic wrote in a statement.Don’t miss these stories from CNBC PRO: More

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    American Airlines’ frequent flyer program is changing. Here’s what you need to know

    American is making a host of changes to its AAdvantage frequent flyer program.
    The carrier limited some services to frequent flyer members.
    American said it won’t change earnings requirements for elite status this year

    An American Airlines Airbus 321 sits at the gate at Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia, on July 23, 2023.
    Daniel Slim | AFP | Getty Images

    First things first: American Airlines isn’t changing the requirements to earn elite status at the airline in the coming earning year.
    Those thresholds are typically top of mind for frequent flyers as airlines have been tweaking their loyalty programs in recent years as travel demand surges and ranks of elites swell.

    And while American increased the threshold to earn its lowest level, Gold, for the 2023-2024 earning year ending Feb. 29, the carrier won’t move those needles for the next earning period. Elite status on airlines rewards big spenders with perks like complimentary upgrades and free checked bags.
    American is making a host of changes, announced Tuesday, that will extend some services solely to AAdvantage members.

    Here’s what’s changing:

    Under the program changes, only American AAdvantage members will be able to fly standby for domestic flights without paying a fee, to hold a flight for 24 hours before booking, or purchase one-day passes to its Admirals Club lounges or Flagship lounges. Currently, all customers can access those services.
    “Just being a member is a status,” said Scott Chandler, American’s senior vice president of loyalty and revenue management.
    AAdvantage members will also be able to use trip credits for six months longer than nonmembers and will be able to get a partial trip credit when canceling restrictive basic economy tickets, if they pay a fee.

    The changes highlight American’s focus on getting more customers to sign up for its loyalty program. These programs generate billions of dollars a year for airlines. Delta Air Lines last year said it would start offering free Wi-Fi on board for members of its SkyMiles frequent flyer program.
    Loyalty programs were a lifeline for airlines during the Covid pandemic when travel slowed to a trickle. Carriers earn money when customers spend on co-branded or other rewards credit cards, selling frequent flyer points to banks, regardless of what customers are spending on, from flights to new countertops.
    American, United and Delta have all recently overhauled their loyalty programs to reward big spenders, with passengers earning more points and elite status based on how much they spend, not how far they fly.
    Carriers have been grappling with a surge in elite travelers, repeatedly increasing the requirements to earn status, and tweaking benefits. Part of that was due to airlines allowing customers to hold onto their status during the pandemic, even though they weren’t traveling.
    Delta last year walked back some of its changes, including stricter limits on access to its popular airport lounges after customer complaints. All three carriers are building larger airport lounges to accommodate more people.
    American also said it will start allowing customers to earn miles for paying for cabin upgrades and let them redeem their miles for upgrades on partner airlines. For customers striving for elite status, the airline will give them bonus loyalty points after they’ve earned 15,000. Gold status, the lowest tier, requires 40,000 loyalty points.

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    United Airlines finds loose bolts on several Boeing 737 Max 9s after grounding

    United Airlines has found loose bolts on door plugs of several Boeing 737 Max 9 planes during inspections.
    The Federal Aviation Administration on Saturday grounded dozens of 737 Max 9s after the panel blew out midflight on Alaska Flight 1282.
    Plane manufacturer Boeing earlier Monday said it sent instructions to airlines to conduct the inspections of the Max 9s in their fleets.

    A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport in California on March 13, 2019.
    Justin Sullivan | Getty Images

    United Airlines said Monday that it has found loose bolts on door plugs of several Boeing 737 Max 9 planes during inspections spurred when a panel of that type blew out during an Alaska Airlines flight using that type of aircraft last week.
    The Federal Aviation Administration on Saturday grounded dozens of 737 Max 9s after the panel blew out midflight on Alaska Flight 1282, calling for inspections.

    United has 79 of the Max 9 planes in its fleet and is the biggest operator of the jet model.
    “Since we began preliminary inspections on Saturday, we have found instances that appear to relate to installation issues in the door plug — for example, bolts that needed additional tightening,” United said in a statement. “These findings will be remedied by our Tech Ops team to safely return the aircraft to service.”
    Plane manufacturer Boeing said earlier Monday it issued instructions to airlines to conduct the inspections of the Max 9s in their fleets. United had begun some preliminary inspection work in the past few days.
    “We are committed to ensuring every Boeing airplane meets design specifications and the highest safety and quality standards,” Boeing said in a statement Monday evening. “We regret the impact this has had on our customers and their passengers.”
    No one was seriously injured in the accident aboard the Alaska Airlines flight, though the blown-out panel produced a force so violent that some headrests and seatbacks were ripped from the cabin and the cockpit door was flung open, according to initial details of a federal safety investigation. No passengers were seated in the two seats next to the panel.

    The National Transportation Safety Board said the accident would have been worse at cruising altitude when passengers and crews are walking around the cabin.
    But the accident places fresh scrutiny on Boeing, which has spent years trying to clean up a host of quality defects, while also ramping up aircraft production, including of the 737 Max. CEO Dave Calhoun has spent months trying to assure airlines, investors and financial analysts that the company is improving its supply chain and working to resolve its quality problems.
    Calhoun canceled a company leadership summit this week and plans to hold an all-employee call on Tuesday.
    Alaska Airlines, which is set to inspect its fleet of more than 60 737 Max 9s, didn’t immediately comment on whether it, too, has found loose bolts.
    The FAA declined to comment on United’s findings. Boeing didn’t immediately respond to CNBC’s request for comment.
    The 737 Max is Boeing’s best-selling aircraft, with more than 4,000 orders to fill. However, the more common Max 8, which is not affected by the grounding, makes up the majority of those orders.Don’t miss these stories from CNBC PRO: More

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    China investors will be asking these 3 questions in 2024

    Despite pockets of strong growth, the China economic investment story has in the last year been overshadowed by longer-term problems and tensions with the U.S.
    “We believe property stabilization, a clear exit from deflation, better policy execution and communication would all be necessary for confidence recovery, with stimulus indispensable and good reforms welcome,” Citi analysts said. “The risk is that markets may not be patient enough with reforms.”

    CHONGQING, CHINA – JANUARY 02: People visit the 2nd International Light and Shadow Art Festival at the Fine Arts Park on January 2, 2024 in Chongqing, China. The 2nd International Light and Shadow Art Festival runs from December 29 to January 7. (Photo by VCG/VCG via Getty Images)
    Vcg | Visual China Group | Getty Images

    BEIJING — Despite pockets of strong growth, China’s investment story has been overshadowed in the last year by longer-term problems and tensions with the U.S.
    Those uncertainties remain as 2024 kicks off. The country is also navigating new territory as it starts to settle into a lower growth range following the double-digit pace of past decades.

    Here’s what investors are looking at for the year ahead:

    Will there be stimulus?

    For all the geopolitical risks, the attraction of China as a fast-growing market has waned as the economy matures.
    Many were disappointed when China’s economy did not rebound as quickly as expected after the end of Covid-19 controls in December 2022. Other than in tourism and certain sectors such as electric cars, sluggish growth was the story for much of 2023, dragged down by real estate troubles and a slump in exports.

    Several international investment banks changed their growth forecasts for China multiple times last year. After all the back and forth, the economy is widely expected to have grown by around 5%.
    “Policy response is essential to solidify the recovery momentum,” Citi analysts said in a Jan. 3 report.

    They expect that as early as January, the People’s Bank of China could reduce rates, such as the reserve requirement ratio — the amount of funds lenders need to hold as reserves. They also project that overall GDP could grow 4.6% this year.
    Beijing has announced a slew of incrementally supportive policies. But it’s taken time to see a clear impact.

    For the people who are already [invested] in China, and they kind of stuck with it for 2023, it’s this belief that the catalyst is coming.

    CIO, Rayliant Global Advisors

    “We believe property stabilization, a clear exit from deflation, better policy execution and communication would all be necessary for confidence recovery, with stimulus indispensable and good reforms welcome,” the Citi analysts said. “The risk is that markets may not be patient enough with reforms.”
    In mid-December, top Chinese authorities held an annual meeting for discussing economic policy for the year ahead. An official readout did not indicate significant stimulus plans, but listed technological innovation as the first area of work.
    Among major upcoming government meetings, Beijing is set to release detailed economic targets during a parliamentary gathering in early March.
    “For the people who are already [invested] in China, and they kind of stuck with it for 2023, it’s this belief that the catalyst is coming,” Jason Hsu, chairman and chief investment officer of Rayliant Global Advisors, said in late November.

    Read more about China from CNBC Pro

    “They’re not really focused on the fundamentals of companies of the markets,” he said. “They’re just betting on purely monetary and fiscal policy to buoy up the economy and the stock market.”
    However, it remains to be seen whether China will boost growth in the same way it did previously.
    “My framework is China is not going to put up significant stimulus,” Liqian Ren, leader of quantitative investment at WisdomTree, said in late November.
    “Even if China has a meeting, even if they come up with a good package, I think a lot of these stimulus are constrained by this framework of trying to upgrade China’s growth,” she said, referring to Beijing’s efforts to promote “high-quality,” rather than debt-driven, growth.

    What will happen to real estate?

    Real estate is a clear example of a debt-fueled sector, one that has accounted for about a quarter of China’s economy.
    The property market slumped after Beijing cracked down on developers’ high reliance on debt for growth in 2020. The industry’s close ties to local government finances, the construction supply chain and household mortgages have raised concerns about spillover to the broader economy.

    The pace of decline in demand has slowed and we expect to see somewhat more stability in 2024.

    Goldman Sachs

    “China’s property downturn has been the biggest drag on its economy since the exit from zero-Covid restrictions in late 2022,” Goldman Sachs analysts said in a Jan. 2 report. “Property sales and construction starts plunged in 2021-22 and continued to decline on net in 2023.”
    “However, the pace of decline in demand has slowed and we expect to see somewhat more stability in 2024,” the analysts said.

    Commercial housing sales for 2023 as of November fell by 5.2% from a year ago, according to National Bureau of Statistics data accessed via Wind Information. That’s after those sales plunged by 26.7% in 2022.
    Although the real estate situation is “gradually stabilizing, it’s hard to see a turning point,” said Ding Wenjie, investment strategist for global capital investment at China Asset Management Co., according to a CNBC translation of her Mandarin language remarks.
    She expects policy support will increase in 2024, because authorities have shifted from focusing on preventing risks to pursuing progress, while maintaining stability. Ding was referring to new official language that appeared in the readout of December’s high-level government meeting.

    Where are the opportunities?

    While it’s clear Beijing would like to reduce the property sector’s contribution to China’s GDP, it’s less certain whether new growth drivers can fill the void.
    Machinery, electronics, transport equipment and batteries combined contributed to 17.2% of China’s economy in 2020, Citi analysts said.
    That means such areas of manufacturing could offset the drag from real estate, the analysts said. But they pointed out the economic transition can’t happen overnight since it requires addressing a mismatch in labor market skills and adjusting a supply chain that’s been built to support property development.
    “Were tech sanctions to become a binding constraint for the new drivers, their potential to make up for the shortfall from property would not materialize,” the report said.

    Despite the macro challenges, Beijing has signaled it wants to bolster domestic tech and advanced manufacturing.
    Ding from China AMC said sub-sectors of high-end manufacturing could benefit this year due to an upturn in the global tech cycle. Examples include those related to consumer electronics and computers.
    She also expects producer prices to return to growth at the end of the second quarter, boosting corporate earnings per share by about 8% to 10% in China. Another area her team is looking at is Chinese companies that are growing their global revenue. More