Bruegel newsletter 18-01-2023
The boom, bust and future of China's real estate sector (bruegel.org)
Since the global financial crisis in 2008, China’s real estate sector has emerged as one of the most important engines of growth in China, contributing more to the economy than even external exports.
A huge investment binge in infrastructure and real estate resulted in a policy push away from external product demand, and housing prices consequently grew at the speed of light. China’s well-known high saving ratio, together with capital controls, have been instrumental in channelling funds to finance the real estate bubble. Chinese households invested up to 80% of their wealth into real estate, and many bought up to several property units, depending on their ability to do so.
As a result, Chinese real estate developers became the largest in the world. That was until the bubble ended abruptly some 18 months ago. (..)2024-01-14
