How China is now turning its real estate market upside down

Qingdao No matter where you are in China, in the coastal city of Qingdao in the east of the country, in northern Datong or in central Chinese Wuhan, they are everywhere: Thousands of concrete frames towering into the sky, next to huge cranes. For years, China’s growth has been based on a construction boom that apparently never wanted to end – financed by more and more debt.

Ghost towns arose in this way in many places, even in booming metropolises like Beijing, buildings fell into disrepair because they were never used. But those days are over if the Chinese leadership has its way.

State and party leader Xi Jinping wants to change the growth model: Less dependence on the real estate sector and on exports, instead domestic consumption should drive the world’s second largest economy.

It is a far-reaching renovation, the consequences of which have been felt for a long time, not just since the fear of the over-indebted real estate developer Evergrande. According to many observers, the risk of contagion emanating from Evergrande seems to be under control from today’s perspective.