Here's Why Here's Why China Can’t Sort Out Its Property Market Mess
Aug 22, 2025
Lulu Chen, who leads Bloomberg's Asian real estate team, dives into the turmoil of China's property market. She shares insights on the sustained decline following Evergrande's collapse, explaining how financial distress is forcing households to sell and leaving developers on the edge. The discussion highlights Beijing's cautious responses, the resilience of state developers, and the looming risk of civil unrest among dissatisfied citizens. Chen effectively unpacks the economic implications of this crisis, making it a must-listen for anyone interested in global finance.
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Bubble Economics Met Demographic Reality
- China's decades-long property boom was unsustainable because population growth slowed and supply reached equilibrium.
- The government's 'three red lines' rule to curb developer debt triggered a credit squeeze that exposed the sector's fragility.
Policy That Tightened The Lifeline
- The 'three red lines' policy directly limited how much debt developers could take on and choked their access to credit.
- That credit cutoff quickly led big firms to struggle and projects to remain unfinished after being pre-sold.
Gradual Fixes Not A Big Bailout
- Beijing has applied many incremental measures but avoided a sweeping bailout or massive liquidity injection.
- Authorities relaxed some rules and eased financing but stopped short of the 'big bazooka' many expected.