Real estate and related industries contribute roughly a quarter of China’s gross domestic product.
“The whole industry is in trouble,” said Kenneth Rogoff, an economics professor at Harvard University, adding that the problems are particularly severe in smaller and medium-size cities.
Years of overbuilding have resulted in a huge oversupply of homes, and there will need to be an adjustment in the property market, he added.
“How do you prevent the Chinese population from going into a panic mode since most of its wealth might collapse? It’s not easy,” Rogoff said.
As of June 30, Country Garden was involved in more than 3,000 property projects encompassing millions of homes. It carried the equivalent of $186 billion in liabilities, including homes it sold but hasn’t delivered
WSJ 18 September 2023