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Former Central Bank Official: China’s Real Estate Industry Will No Longer Drive Economic Growth

A former Chinese official, Sheng Songcheng, wrote an article titled, “China’s Real Estate Market Is Now at a Turning Point.” Sheng is the former Director of the Survey and Statistics Department of the People’s Bank of China and is now a Professor of Economics and Finance at the China Europe International Business School.

Sheng said that China’s real estate industry is a at a transition point. In the future, China is unlikely to rely on this industry to boost large economic growth. China’s per capita dwelling space is close to 2/3 of that of the United States, while its per capita GDP is only 1/6 of that of the U.S. This indicates that the development of China’s real estate industry has reached a new stage (a ceiling).

Sheng argued that, although real estate development may not help the economic growth much in the long run, it still can in the short term, especially during the downfall of the economy due to the COVID lockdown,. He suggested that the government should loosen policies and provide more money to help the struggling real estate companies to complete their projects.

Source: SINA, July 29, 2022