China’s indebted property sector highlights a fading economic revival

China’s economy has become heavily dependent on property development over the last decade. High-rise apartments have mushroomed across hundreds of cities to house a growing white-collar workforce, while glass and steel office blocks are dominating city centres, mimicking Shanghai’s glittering skyline.

Valued at more than $50tn after 20 years of rapid growth, Chinese real estate is worth twice as much as the US property market and four times China’s annual income.

George Magnus, an associate at Oxford University’s China Centre, says this real estate market ranks as the most important single commercial sector in the world. Leaders in Beijing, aware that the boom was running out of steam before the pandemic hit, have spent the last year trying to bring the ballooning, largely private-sector industry painlessly down to earth. Tighter regulations have curtailed borrowing binges and speculative building projects have begun to dry up.

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