Shaky scaffolding: Why is China's real estate sector facing a crisis?

Big property developers in China, like Evergrande, are facing a massive shortfall of money, dragging down the sector along with the home demand and prices

China's economy showed signs of a slowdown in the latest data released for July. Covid-19 cases have been rising, and the government, under its 'zero Covid' policy, has imposed lockdowns in various economic hotspots, including Shanghai and Wuhan. This has led to a fall in demand as well as production.

The country barely escaped a contraction in the second quarter, growing just 0.4 per cent.

However, one of the biggest concerns that stare China in the eye is the real estate crisis. Big property developers are facing a massive shortfall of money, dragging down the sector along with