China’s regulatory crackdown has wiped billions off technology companies’ market value. But the continuing squeeze on real estate—if allowed to run much further—could have even bigger repercussions.

Property is arguably the most crucial industry in China. Including related businesses like construction materials and housing appliances, the sector accounted for 16.4% of China’s economy last year, according to Nomura. Despite Beijing’s constant refrain that “housing is for living in, not for speculation,” property prices, especially in the biggest cities, have continued to rise. One reason: The housing market has long been an important lever to boost the economy during downturns, leading to a seemingly endless cycle of tightening and easing.

This latest round of tightening started last year with Beijing’s new “three red lines” policy capping…

Read more…

Share.

Comments are closed.