China's Real Estate Sector in Decline

China's real estate market is under pressure. The number of apartments completed by Chinese real estate developers has been hovering around the six-million mark for five years. Meanwhile, the industry's profits have collapsed, having fallen by 50 percent between 2018 and 2022. This is according to the National Bureau of Statistics of China.

Observers are talking about a collapse in China's real estate industry, which would affect the country's economic strength. At the end of January, the crisis reached a milestone when parts of the loss-making and highly indebted developer Evergrande - once a symbol of China's lucrative real estate boom - went to liquidation. The process is ongoing and, as CNN reports, the company's main development arm in Mainland China, Hengda Real Estate Group, will not be affected as it is an independent legal entity. The successful petition to liquidate was filed by overseas creditors in Hong Kong, where the company lists stock. This means that the future of the embattled company in China and the effect of its issues on the country's economy are still unclear.

China reported an economic growth of 5.2 percent in 2023. Experts, however, doubt the figure as are many opportunities for whitewashing in an autocratic system like China's. It can therefore not be ruled out that the official data on profits and completed apartments shown in the graphs do not represent an accurate reflection of economic development and that the situation is even more dire.