Book contents
- Reviews
- The Arc of the Chinese Economy
- The Arc of the Chinese Economy
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Contributors
- Foreword
- Acknowledgments
- Abbreviations
- 1 The Arc of the Chinese Economy
- 2 China’s Productivity Challenge
- 3 Innovation in China
- 4 When the Abundance Ends
- 5 Derisking Real Estate in China’s Hybrid Economy
- 6 State Ownership in China
- 7 China’s Journey in Embracing Economic Openness
- 8 RMB Internalization and Digitization
- 9 The Political Economy of Common Prosperity
- 10 The “Summer of 2021” and the Trajectory of China’s Economic System
- 11 China’s Coming Era of Slow Growth
- Index
- References
5 - Derisking Real Estate in China’s Hybrid Economy
Published online by Cambridge University Press: 30 October 2025
By
Book contents
- Reviews
- The Arc of the Chinese Economy
- The Arc of the Chinese Economy
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Contributors
- Foreword
- Acknowledgments
- Abbreviations
- 1 The Arc of the Chinese Economy
- 2 China’s Productivity Challenge
- 3 Innovation in China
- 4 When the Abundance Ends
- 5 Derisking Real Estate in China’s Hybrid Economy
- 6 State Ownership in China
- 7 China’s Journey in Embracing Economic Openness
- 8 RMB Internalization and Digitization
- 9 The Political Economy of Common Prosperity
- 10 The “Summer of 2021” and the Trajectory of China’s Economic System
- 11 China’s Coming Era of Slow Growth
- Index
- References
Summary
This chapter examines the challenges and risks within China’s real estate sector, a cornerstone of its hybrid economy that blends state intervention with market dynamics. The analysis highlights how local governments’ heavy reliance on land sales and debt financing has spurred over-investment and elevated leverage, creating systemic risks for both the financial system and broader economic growth. It discusses the roles of various channels – financing, tournament, and central government guarantees – in exacerbating market distortions and encouraging speculative behavior. The chapter also reviews recent market trends during the COVID-19 period, revealing significant mismatches between demand, supply, and pricing across different city tiers. While government interventions have successfully postponed a hard landing, they may not address underlying structural issues. Ultimately, the chapter argues that sustainable risk mitigation in the real estate sector requires structural reforms and the development of new economic growth engines to reduce over-dependence on real estate.
Keywords
Information
- Type
- Chapter
- Information
- The Arc of the Chinese Economy , pp. 123 - 155Publisher: Cambridge University PressPrint publication year: 2025
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