User:Wuwenhao19960507/Real estate in China

The origins of modern real estate enterprises in China can be traced back to the mid-19th century. After the First Opium War in 1840, foreign powers established concessions in cities such as Shanghai, Guangzhou, and Tianjin. The influx of large populations into these areas led to increased housing demand, prompting both Chinese and foreign merchants to engage in real estate development, with land values and property prices rising significantly during this period. By the 1920s, independent real estate companies had gradually replaced landlord-run rental agencies and offices, becoming the dominant force in China’s real estate sector. The industry experienced rapid growth until the full-scale outbreak of the Second Sino-Japanese War in 1937. After the war ended in 1945, the real estate market briefly recovered as wartime migrants returned home. However, with the eruption of the second phase of the Chinese Civil War in 1946, the industry began to decline. Prior to the establishment of the People’s Republic of China in 1949, foreign-owned properties in China totaled over 10 million square meters, concentrated in major cities such as Shanghai, Nanjing, and Beiping (now Beijing), and were held by entities from 34 countries including the United Kingdom and the United States.{{Cite journal |last=陈 |first=龙乾 |last2=许 |first2=鹏 |last3=张 |first3=志杰 |last4=陈 |first4=龙高 |date= |title=中国房地产业发展的历史、现状及其前景 |url=https://qikan.cqvip.com/Qikan/Article/Detail?id=1000345756&from=Qikan_Search_Index |journal=中国矿业大学学报（社会科学版） |language=zh |publication-date=2003 |trans-quote=The History, Current Situation, and Prospects of the Development of China's Real Estate Industry}}

From the founding of the People's Republic of China in 1949 until 1978, a fully public ownership economic system was implemented. Urban land was entirely nationalized, and all properties owned by Nationalist government and its military and political officials were confiscated. Foreign-owned real estate was also uniformly brought under state ownership. Remaining properties were turned into state assets through means such as takeover, requisition, debt repayment, or purchase. All public properties were managed uniformly by government departments. Initially, a small number of privately owned properties were allowed to operate legally, but these were gradually expropriated during the Socialist Transformation ({{Interlanguage link|Socialist Transformation (of the means of production）|zh|生产资料所有制的社会主义改造}}) and the 1958 state buyout—a process that scholars have described as eliminating the real estate industry as an independent economic sector.

File:南京旭光里小区 - panoramio (1).jpgBefore the 1978 Reform and Opening-Up, Mainland China operated under a centrally planned economy.{{Cite book |last=Qian |first=Yingyi |url=https://books.google.co.kr/books?hl=zh-CN&lr=&id=fqZADwAAQBAJ&oi=fnd&pg=PR7&dq=Before+the+1978+Reform+and+Opening-Up,+Mainland+China+operated+under+a+centrally+planned+economy.&ots=bFKK-d40_W&sig=gN_EH5rP4fqEMSCiu5gyzbF5EQU&redir_esc=y#v=onepage&q&f=false |title=How Reform Worked in China: The Transition from Plan to Market |date=2017-11-24 |publisher=MIT Press |isbn=978-0-262-34271-1 |language=en}} Housing was not treated as a commodity but as a form of welfare. Productive real estate, such as factory buildings and infrastructure, was financed and allocated by the state without compensation, while non-productive housing, including employee residences, was also planned, constructed, and distributed by government agencies and state-owned work units under a unified administrative system.{{Cite journal |last=Fang |first=Changchun |last2=Iceland |first2=John |date=2018-09-21 |title=Housing inequality in urban China: the heritage of socialist institutional arrangements |url=https://doi.org/10.1186/s40711-018-0082-9 |journal=The Journal of Chinese Sociology |doi=10.1186/s40711-018-0082-9 |issn=2198-2635}}{{Cite web |last=YE |first=Jianping |date=21 April 2025 |title=China Housing Policy and Housing Market |url=https://www.prres.org/uploads/460/1059/Ye_China_Housing_Policy_and_Housing_Market.pdf?utm_source=chatgpt.com |archive-url=https://archive.org/details/ye-china-housing-policy-and-housing-market |archive-date=22 April 2025}} Scholars have noted that housing was financed by government capital expenditure and allocated by work units, with user-residents paying only nominal rents. This model placed long-term fiscal pressure on state institutions responsible for maintenance and service provision. In the late 1970s, official surveys indicated that average urban living space per person was below 4 square meters, reflecting a severe housing shortage. Many residents lived in overcrowded communal apartments({{Interlanguage link|Communal apartments in China|zh|筒子楼}}), often sharing kitchens and bathrooms with multiple households.{{Cite journal |last=Lu |first=Gao, |date=1 April 2010 |title=Achievements and Challenges: 30 Years of Housing Reforms in the People’s Republic of China |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1619161 |journal=Asian Development Bank Economics Working Paper Series No. 198 |language=en |publisher=Asian Development Bank |archive-url=http://web.archive.org/web/20250127093531/https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1619161 |archive-date=27 January 2025}}

In October 1979, China's first commercial housing project, Donghu New Village in Guangzhou, was approved for construction. In January 1980, the Shenzhen Special Economic Zone saw the signing of the country’s first cooperative housing construction contract, as well as the establishment of the first real estate enterprise in mainland China — the Shenzhen Special Economic Zone Real Estate Company（{{Interlanguage link|the Shenzhen Special Economic Zone Real Estate Company|zh|深深房}}）.{{Cite news |last=Hu |first=Tianxiang |date=2020-08-25 |title=深圳地产四十年：拓荒牛与风向标 |url=https://finance.sina.com.cn/roll/2020-08-25/doc-iivhvpwy2861389.shtml |archive-url=https://web.archive.org/web/20210708105630/https://finance.sina.com.cn/roll/2020-08-25/doc-iivhvpwy2861389.shtml |archive-date=2021-07-08 |work=时代周报 |publisher=Time Weekly |language=zh |trans-quote=Forty Years of Shenzhen Real Estate: Pioneering Spirit and Market Barometer}}

In June 1980, the Central Committee of the Chinese Communist Party and the State Council officially approved the implementation of housing commodification by endorsing the Outline Report of the National Conference on Capital Construction.{{Cite web |last=Sun |first=Yubo |date=29 January 2009 |title=住房和城乡建设部：住房制度改革从三个方面推进 |url=https://www.gov.cn/jrzg/2009-01/29/content_1216890.htm |access-date=2025-04-22 |website=www.gov.cn |publisher=Xinhua News Agency |language=zh |trans-quote=Ministry of Housing and Urban-Rural Development: Housing system reform is being advanced through three main approaches.}} The policy permitted private individuals to build, purchase, and own residential properties. By October of the same year, 128 cities and several counties and towns across the country had launched pilot programs for private housing construction and sales.{{Cite journal |last=Zhang |first=Qizai |date=1997 |title=住房商品化进程中的问题与对策 |url=https://qikan.cqvip.com/Qikan/Article/Detail?id=3001049632&from=Qikan_Search_Index |journal=红旗文稿 |language=zh |trans-quote=Problems and Countermeasures in the Process of Housing Commodification}}

On April 12, 1988, the First Session of 7th National People's Congress adopted a constitutional amendment, revising Article 10, Paragraph 4 of the Constitution.{{Cite journal |last=Badcock |first=Blair |date=1986-05-01 |title=Land and housing policy in Chinese urban development, 1976–86 |url=https://www.tandfonline.com/doi/epdf/10.1080/02665438608725620?needAccess=true& |journal=Planning Perspectives |volume=1 |issue=2 |pages=147–170 |doi=10.1080/02665438608725620 |issn=0266-5433}} The original provision — “No organization or individual may usurp, buy, sell, lease or otherwise illegally transfer land” — was amended to: “No organization or individual may usurp, buy, sell or otherwise illegally transfer land. The right to the use of land may be transferred in accordance with the provisions of the law. {{cite web |date=1988-02-28 |title=中国共产党中央委员会关于修改中华人民共和国宪法个别条款的建议 |url=http://www.npc.gov.cn/wxzl/gongbao/2000-12/16/content_5002073.htm |url-status=live |archive-url=https://web.archive.org/web/20180309120458/http://www.npc.gov.cn/wxzl/gongbao/2000-12/16/content_5002073.htm |archive-date=2018-03-09 |access-date=2018-03-10 |publisher=The National People's Congress of China website |language=zh |trans-quote=Proposal of the Central Committee of the Communist Party of China on Amending Certain Articles of the Constitution of the People's Republic of China}} The 1988 constitutional amendment has been interpreted by scholars as a formal recognition of the shift toward marketization in China’s land use system.{{Cite web |date=2023-01-09 |title=新中国土地拍卖“第一槌” |trans-title=First land auction in New China |url=https://www.sz.gov.cn/szstory/202301/content/post_10371168.html |access-date=2025-04-08 |website=Shenzhen Archives |language=zh}}

In May 1990, the State Council promulgated the Interim Regulations of the People's Republic of China Concerning the Assignment and Transfer of the Right to the Use of the State-Owned Land in the Urban Areas, officially launching the nationwide implementation of the paid land-use rights transfer system.{{Cite web |title=Interim Regulations of the People's Republic of China Concerning the Assignment and Transfer of the Right to the Use of the State-owned Land in the Urban Areas - Wikisource, the free online library |url=https://en.wikisource.org/wiki/Interim_Regulations_of_the_People's_Republic_of_China_Concerning_the_Assignment_and_Transfer_of_the_Right_to_the_Use_of_the_State-owned_Land_in_the_Urban_Areas |access-date=2025-04-08 |website=Wikisource |language=en}}

Following Deng Xiaoping’s 1992 “Southern Tour,” market reforms accelerated across various sectors, including housing. In 1994, the State Council issued the “Decision on Deepening the Urban Housing Reform,” which formally laid out the goal of establishing a housing market based on private ownership and monetary compensation, replacing the decades-old welfare allocation system（{{Interlanguage link|Welfare allocation system|zh|福利分房}}）.{{Cite book |last=Deng |first=W |url=https://research.tudelft.nl/en/publications/urban-housing-policy-review-of-china-from-economic-growth-to-soci |title=Urban housing policy review of China: from economic growth to social inclusion |last2=Hoekstra |first2=JSCM |last3=Elsinga |first3=MG |date=2015 |publisher=Delft University of Technology, Onderzoeksinstituut OTB |volume=OTB working papers |location=Delft}}{{Cite web |title=国务院关于深化城镇住房制度改革的决定（国发〔1994〕43号） _中国政府网 |url=https://www.gov.cn/zhuanti/2015-06/13/content_2878960.htm |access-date=2025-04-22 |website=State Council of the People's Republic of China |language=zh |trans-quote=Decision on Deepening the Urban Housing Reform (Guo Fa [1994] No. 43)}}

In 1998, the State Council issued a directive formally ending the practice of in-kind housing allocation by work units. From that point onward, housing was no longer provided by work units , and urban residents were encouraged to purchase housing through the commercial market. Millions of state-owned housing units were sold to employees at subsidized prices, significantly increasing the proportion of privately owned housing in urban areas.{{Cite journal |last=FUNG |first=HUNG-GAY |last2=HUANG |first2=ALAN GUOMING |last3=LIU |first3=QINGFENG "WILSON" |last4=SHEN |first4=MAGGIE XIAOQIN |date=2006-02-01 |title=The Development of the Real Estate Industry in China |url=https://www.tandfonline.com/doi/pdf/10.2753/CES1097-1475390104 |journal=Chinese Economy |language=EN |doi=10.2753/CES1097-1475390104 |issn=1103-3541}} Scholars have interpreted this shift as a critical step in the commodification and privatization of urban housing in China. Concurrently, the reform of housing finance（{{Interlanguage link|Reform of housing finance|zh|城镇住房制度改革}}）played a key supporting role.{{Cite book |last=Man |first=Joyce Yanyun |url=https://cup.columbia.edu/book/chinas-housing-reform-and-outcomes/9781558442115/ |title=China's Housing Reform and Outcomes |date= |publisher=Lincoln Institute of Land Policy |isbn=978-1-55844-211-5 |publication-date=April 2011 |language=en}} The Chinese government expanded access to mortgage lending, encouraged the growth of commercial banks, and promoted the development of a secondary housing market.{{Cite journal |last=Zhihua |first=Zhou |date=2015-12-01 |title=The Development of Mortgage Finance in China |url=https://journals.openedition.org/chinaperspectives/6862?utm_source=chatgpt.com |journal=China Perspectives |language=en |volume=2015 |issue=4 |pages=51–61 |doi=10.4000/chinaperspectives.6862 |issn=2070-3449}} Real estate enterprises began to play a more prominent role in the urban economy, while local governments increasingly relied on land conveyance fees as a significant source of revenue—a trend that would intensify in later years.

According to data from the National Bureau of Statistics of China, the number of real estate development enterprises in Mainland China rose from 89,859 in 2012 to a peak of 105,434 in 2021, before declining to 100,111 by 2023.1 Throughout this period, over 95% of enterprises were domestically funded, demonstrating the overwhelming presence of local capital in the industry.{{Cite web |title=National Data |url=https://data.stats.gov.cn/english/ |access-date=2025-04-23 |website=data.stats.gov.cn}} Enterprises funded by investors from Hong Kong, Macao, and Taiwan declined from 3,451 in 2012 to 2,448 in 2023, while foreign-funded enterprises fell from 1,713 to 734, indicating a long-term reduction in external participation.

Employment in China's real estate sector remained relatively high until 2020, when it peaked at approximately 29.0 million people. However, employment levels declined significantly thereafter, falling to around 20.0 million by 2023. This reduction in workforce size corresponds with a broader cooling trend in the real estate market during the early 2020s.

Completed investment in the real estate sector rose from 7.18 trillion yuan in 2012 to 13.76 trillion yuan in 2021, before declining to 11.21 trillion yuan in 2023. The construction area under development showed a similar trajectory, expanding from 573 million square meters in 2012 to 975 million square meters in 2021, then dropping to 840 million square meters by 2023.

Scholars have observed that the real estate sector's shift from rapid expansion to consolidation in the early 2020s was influenced by regulatory reforms, such as the "three red lines" policy, tighter financing conditions, and declining housing demand.{{Cite journal |last=Yang |first=Chenrui |last2=Zhang |first2=Xiaojian |last3=Zhu |first3=Youzheng |last4=Sun |first4=Yizhuo |date=2023-09-13 |title=The Impact of Three Red Lines Policy on Chinas Real Estate Industry |url=https://doi.org/10.54254/2754-1169/7/20230252 |journal=Advances in Economics, Management and Political Sciences |volume=7 |issue=1 |pages=335–342 |doi=10.54254/2754-1169/7/20230252 |issn=2754-1169}}

Since the mid-2010s, the Chinese government has introduced a series of regulatory measures aimed at stabilizing the real estate market and discouraging speculative investment. In 2016, the central government adopted the principle that“houses are for living, not for speculation,” a slogan first emphasized by President Xi Jinping and later incorporated into national housing policy.{{Cite news |last=Zhou |first=Cissy |date=21 October 2022 |title=What Xi Jinping has done for Chinese business |url=https://asia.nikkei.com/Business/Business-Spotlight/What-Xi-Jinping-has-done-for-Chinese-business |access-date=5 February 2025 |work=Nikkei Asia}}{{Cite book |last=Zhang |first=Angela Huyue |title=High Wire: How China Regulates Big Tech and Governs Its Economy |publisher=Oxford University Press |year=2024 |isbn=9780197682258 |doi=10.1093/oso/9780197682258.001.0001}}

In August 2020, the Ministry of Housing and Urban-Rural Development introduced the "three red lines" policy, setting thresholds on debt ratios for property developers based on liabilities-to-assets, net gearing, and cash-to-short-term debt ratios.{{Cite web |last= |first= |date=8 October 2020 |title=What China's Three Red Lines Mean for Property Firms |url=https://www.bloombergquint.com/global-economics/what-china-s-three-red-lines-mean-for-property-firms-quicktake |access-date=2021-12-13 |website=Bloomberg News |language=en}} Following its implementation, several major developers, including China Evergrande Group, faced liquidity challenges.{{Cite web |last=Cheng |first=Evelyn |date=2021-10-19 |title=How Evergrande found itself on the wrong side of China's regulators |url=https://www.cnbc.com/2021/10/19/how-evergrande-found-itself-on-the-wrong-side-of-chinas-regulators.html |access-date=2021-12-13 |website=CNBC |language=en}} The International Monetary Fund (IMF) noted growing stress in China's property sector, observing that financial strains at Evergrande had begun to spill over to other developers.{{Cite web |last=YAN |first=TING |last2=Berger |first2=Helge |date=January 28, 2022 |title=Press Briefing 2021 China Article IV |url=https://www.imf.org/en/News/Articles/2022/01/29/tr012722-press-briefing-2021-china-article-iv?utm_source=chatgpt.com |access-date=2025-04-23 |website=IMF |language=en}}

In response to the slowdown in the housing market that followed, the Chinese government began to implement supportive measures in 2022 and 2023.{{Cite web |last=Nussupbekova |first=Tamila |date=1 November 2024 |title=China's Residential Property Market Analysis 2024 |url=https://www.globalpropertyguide.com/asia/china/price-history |access-date=23 April 2025 |website=Global Property Guide |language=en}} These included reductions in mortgage interest rates, lower down payment requirements, and expanded funding for affordable housing projects. Local governments were also granted greater flexibility to adapt housing policies according to regional conditions.{{Cite journal |last=Ma |first=Luyao |last2=Liu |first2=Zhilin |date=2024-09-01 |title=How do local governments respond to central mandate in affordable housing policy? A qualitative comparative analysis of forty-one Chinese cities |url=https://www.sciencedirect.com/science/article/pii/S2226585624000621?utm_source=chatgpt.com |journal=Journal of Urban Management |volume=13 |issue=3 |pages=386–397 |doi=10.1016/j.jum.2024.05.003 |issn=2226-5856}}

Despite these interventions, challenges persisted into 2024, prompting the Chinese government to further expand credit support. In early 2024, the Chinese government announced plans to provide approximately 4 trillion yuan (about US$560 billion) in financing for approved housing developments, as part of broader efforts to stabilize the sector and bolster economic activity.{{Cite news |last=Cash |first=Joe |last2=Gao |first2=Liangping |date=17 October 2024 |title=China boosts funds for housing projects to support embattled sector |url=https://www.reuters.com/world/china/china-expand-financing-housing-projects-4-trln-yuan-says-housing-minister-2024-10-17/ |archive-url=http://web.archive.org/web/20241119135305/https://www.reuters.com/world/china/china-expand-financing-housing-projects-4-trln-yuan-says-housing-minister-2024-10-17/ |archive-date=2024-11-19 |access-date=2025-04-23 |work=Reuters |language=en}}{{Cite web |date=17 October 2024 |title=China unveils new measures to stabilize housing market |url=https://english.www.gov.cn/news/202410/17/content_WS67111067c6d0868f4e8ebfd0.html?utm_source=chatgpt.com |access-date=2025-04-23 |website=Xinhua News Agency}}