Goldman Sachs lowered its outlook for the MSCI China after the Chinese real estate market plummeted.
The MSCI China is an index that tracks the shares of over 700 Chinese companies listed on stock exchanges around the world. These include Tencent, BYD and the Industrial and Commercial Bank of China (ICBC).
Goldman Sachs lowered its growth forecast for MSCI China to 0% from 4% previously.
The MSCI China Index fell more than 6% in July as investors worried about a slowdown in China’s property market. Add to that the impact of the Covid 19 epidemic and the Chinese government’s measures to control the economy, technology and geopolitical problems.
The Chinese real estate market has been in serious trouble for several weeks. The reason is that home buyers refuse to pay mortgages for unfinished real estate projects. In China, it is common to buy a house before it is completed. The unfinished projects were caused by real estate developers who lacked the money to continue their business.