Housing bubble could threaten China’s economy

Hundreds of thousands of Chinese people sent angry messages to several banks and local governments that have reverberated in Beijing’s halls of power. Most messages read: “If you stop construction, I will stop paying my mortgage”. Similar threats have been made across 328 property development projects in nearly 100 Chinese cities.

What has prompted so many people to speak out? The short answer is that construction has stalled at apartment complexes. apartments have eaten life savings. The long answer traces to deep-seated problems in China’s real estate sector that have been brewing for decades and laid bare over the past two years.

China’s property boom has been a huge driver of the country’s economic growth. But now two factors have brought developers to their knees: China’s economic headwinds due to its strict “zero-covid” policy and government effort to rein in the real estate industry’s soaring debt.

That slow-motion crisis has many roots. To some extent, it was planned: The government explicitly wanted to cool down the red-hot property sector.