Indeed, the slowdown in economic growth and lackluster demand for overseas bulk commodities can be attributed, without exaggeration, to the national stimulus policies implemented in the second half in 2008. The overly proactive fiscal policies and loose monetary policy of that year led to a quick surge of the price of domestic assets, especially in the real estate market, causing housing prices to soar. As a result, domestic investments in fixed assets mounted, leading to an omnipresent glut in various industries.

This breakneck escalation of housing prices and substantial gains from the housing market triggered a severe economic surplus after the lucrative market enticed a number of construction-related industries, like steel and building materials, to expand rapidly.

This dependence on property market is completely unsustainable and is doomed to be restructured. These negative impacts from the rampant expansion of property market and the other industries in the chain are affecting the economy at the same time as the recent policy adjustments are beginning to take hold.

Therefore, the decline in domestic economic growth is mostly the result of the over-expanded real-estate market rather than weakened overseas demand, although the latter has been influential as well.

Take apartment sales from May to June for example. Although the market showed signs that it was heating up compared to previous months, sales fell by at least 5 percent. The decline in sales subsequently led to a surplus in inventory of building materials, iron ores, coal and electricity, creating a domino effect which extended to industries on both sides of the supply chain.