Pan Shiyi, the prominent Chinese real estate entrepreneur and founder of SOHO China, who has kept a low profile for three years, recently published an article describing nearly three decades of mainland China’s property market development as resembling a “Ponzi scheme.”
In a post titled “My Reflections” on his personal WeChat public account, Pan recalled how in 1998, when China began developing commercial housing, developers traveled to Hong Kong to learn sales methods, picking up concepts like mortgages and pre-sales. He noted that the industry soon adopted a high-leverage, high-turnover model that quickly became distorted on the mainland.
Within just a few years, competition in the sector shifted away from building and selling quality homes, and instead became a race to acquire more land, secure financing faster, and expand more aggressively.
Pan described a deeply interconnected and fragile system: developers survived on pre-sale revenues, companies kept afloat by borrowing new money to repay old debts, local governments depended on land sales for income, and homebuyers believed property prices would rise indefinitely. “Tie these four things together,” he wrote, “and if any one of them breaks, the rest will collapse.”
He noted that for a considerable period, the practices of some property developers were no different from a Ponzi scheme. The losses caused now amount to trillions of yuan (hundreds of billions of U.S. dollars), bringing pain to countless families.
Pan concluded that while judicial authorities have identified the specific wrongdoings of certain developers, the crisis is the combined result of systemic, financial, fiscal, corporate, and social factors. He noted that China’s property market has been declining for 47 consecutive months, and that restoring confidence — built on integrity — is now the most critical task.
Pan, 62, relocated to the United States in 2014 after selling off large amounts of assets. The IP address of his post was traced to the U.S., though he has previously stated he retains Chinese citizenship.
Source: Central News Agency (Taiwan), April 17, 2026
https://www.cna.com.tw/news/acn/202604170043.aspx