China's real estate crisis, explained

Planet Money

NPR

Business, News

4.6 • 29.8K Ratings

🗓️ 15 November 2023

⏱️ 21 minutes

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Summary

China's economic growth for the past few decades has been extraordinary. And much of that growth was fueled by real estate – it was like this miraculous economic engine for the country. But recently, that engine seems to have stopped working. And that has raised all kinds of questions not just for China but also for the global economy.

Today on the show, we look at what's happening inside China's real estate market. And we try to answer the question: how did we get here?

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Transcript

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0:00.0	This message comes from NPR sponsor, Barclay's Corporate and Investment Bank,
0:04.4	Powering Sustainable Growth in a Changing World,
0:07.2	Powering Financial Solutions that Transform Industries.
0:10.6	Barclay's Corporate and Investment Bank, powering possible.
0:15.0	This is Planet Money from NPR.
0:21.0	There is a real estate crisis in China right now and it's a big deal because China's
0:26.6	real estate market is really big. It's the largest asset class in the world.
0:31.1	All in all property in China is worth, according to some estimates, something
0:34.3	like $60 trillion. But over the past couple of years, that number has been shrinking.
0:41.5	And it's the property developers in China that are having the most obvious
0:44.9	troubles right now. They've started to miss payments on loans, they've even been defaulting.
0:49.7	Of course, these things didn't just happen.
0:52.8	There's a long story behind how China's real estate
0:55.8	got into this mess, the story I asked NPR International
0:58.8	Correspondent Emily Fang to help me tell.
1:01.3	Here we go.
1:01.9	Ah, there you are. Yep. Cool. No one does it better than Emily.
1:06.0	No one can combine the on-the-ground China reporting with the deep historical knowledge that Emily has.
1:11.9	Stop it.
1:13.0	If I could blush, I'd blush.
1:15.0	I mean it.
1:16.0	And Emily, why don't we start here?
	...

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