New Report | China's Property Sector: A Roundtable Summary Report
NEW YORK; August 3, 2023 – China’s property market slowdown could be prolonged and exercise a drag on China’s overall economic growth, according to a new report from the Asia Society Policy Institute’s Center for China Analysis and the Stanford Center on China’s Economy and Institutions.
The report, “China’s Property Sector: A Roundtable Summary Report,” is a summation of a day-long, virtual closed-door roundtable discussion organized by both institutions that convened leading economic experts under the Chatham House Rule.
For three decades, the property sector has been a major engine of economic growth in China, accounting for about a quarter of its GDP in the 2010s. By 2021, however, there were signs that China’s property sector may be reaching a peak and even beginning to contract, potentially signifying wider distress in the economy.
The roundtable focused on four key questions:
- How sharp and sustained do we expect the slowdown in China’s property sector to be?
- What are the most important determinants of this slowdown: government policy or structural factors?
- What are the implications of China’s property slowdown for other areas of the Chinese economy?
- What can China do to offset the risks and negative consequences associated with the property slowdown?
Most participants agreed on the following key takeaways:
- The root causes of the property market slowdown were structure, but that short-term policies like 2020’s “three red lines” exacerbated the situation.
- Property sector downturn could have an outsized impact on China’s economy, given its function as a key node connecting local government revenues, the financial sector, household wealth, and the construction industry.
- China should use the current slowdown as an opportunity to shift structurally towards a new growth model that is less dependent on the property sector.
Since 2022, the Center for China Analysis has partnered with the Stanford Center on China’s Economy and Institutions (SCCEI), Stanford University’s main hub for multidisciplinary, data-driven research on China’s economy, to collaborate on advancing the study of China. Convening experts from both institutions as well as leading global scholars for high-level roundtables and other engagements, the partnership aims to help produce and disseminate groundbreaking academic research and analysis on all facets of the Chinese economy for policymakers and other public stakeholders around the world.