The real estate industry continues to power China’s economy. Credit: Xu Jinbai/VCG via Getty Images
People in mainland China weren’t allowed to own property until 1998. Since then, home ownership rates have blossomed. But explosive growth has also fueled a building boom that has saddled some of the nation's biggest property developers with precarious levels of debt.
China’s massive property sector sops up steel and cement for major projects each year, creating a symbiotic relationship with the country’s construction firms. One estimate put the real estate industry’s contribution to China’s GDP at 7 percent in 2019, with related sectors like home furnishings bringing up the total to 17.2 percent.
The industry is also important for Chinese consumers as a mechanism for investment. A 2018 study estimated that Chinese citizens put nearly three-quarters of their savings into property, compared to just a third for Americans. “Chinese end-users have limited room to deploy their savings into alternatives outside China,” says Henry Chin, head of Asia Pacific research at rea
Exclusive longform investigative journalism, Q&As, news and analysis, and data on Chinese business elites and corporations. We publish China scoops you won't find anywhere else.
A weekly curated reading list on China from David Barboza, Pulitzer Prize-winning former Shanghai correspondent for The New York Times.
A daily roundup of China finance, business and economics headlines.
We offer discounts for groups, institutions and students. Go to our Subscriptions page for details.
At first glance, the recent raid on Capvision, a Shanghai consultancy, looks similar to the raids on foreign firms Mintz Group and Bain & Company. But there are reasons to separate Beijing's crackdown on Capvision. For starters, Capvision is Chinese and its shareholders and investors include a network of remarkably high profile and state-connected individuals and companies.
