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Open QuestionsChina’s property bender has led to long, tough hangover: economist Mao Zhenhua
- Surge in household debt, collapse in property values highlight need for real estate wind-down, cash handouts to spark consumer demand
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Mao Zhenhua is the founder of China Chengxin Credit Rating Group and co-director of Renmin University’s Institute of Economic Research. He is a regular commentator on China’s economy, has been a professor at the University of Hong Kong’s Business School since 2022, and was among the first to warn about the underlying pressure on China’s property prices.
In this latest interview in the Open Questions series, Mao analyses China’s struggling property sector, reflects on US-China tensions, surveys the results of the highly anticipated third plenum and examines the changing nature of Hong Kong’s role in the broader economy. For other interviews in the Open Questions series, click here.
The property market in China has been in crisis after a series of defaults by developer Evergrande in 2021. You first noted the potential consequences of their liquidity problems 10 years prior. How do you assess the downturn's impact on China’s economy now?
Real estate has become the most intense issue affecting China’s economy. In the past, China’s real estate was a focus of investment for all of society. Real estate prices were rising continuously, and it was commonly accepted that every adult should have his own house, which is a unique belief.
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