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>China’s property sector has been in a bear market since 2021, with average prices falling by 40% to 50%. This was partly by design. Beijing in 2020 sought to deflate a ballooning property bubble with its “three red lines” policy that clamped down on leverage in the sector.
>While weakness in Chinese construction and ancillary businesses may continue to drag on economic growth for the next year, it appears that the property correction is bottoming out. Shanghai’s property prices in the secondary market have begun to rise, and the pace of decline in home prices has again eased in March, with the worst contraction in prices recorded in late 2024.
>Given the scale of the property market deflation, it’s remarkable that very few things broke in China. This was in contrast to the doomsday predictions that the correction would be in line with – or much worse than – what happened in Japan after its property market peaked in 1989.
>That’s not what happened.
>Beijing used this challenging period as an opportunity to shift its policy aim from maximising economic growth to improving the quality of its growth.
>China’s GDP is no longer being flattered by the housing boom but is instead being sustained by activities likely to support China’s long-term development. This includes efforts to achieve dominance in artificial intelligence, higher-technology manufacturing and alternative energy.
>There are still causes for concern, of course. China continues to struggle to stimulate sufficient domestic demand and cutthroat competition has shrunk profit margins at home. However, the export market still typically provides Chinese producers with generous profit margins.
https://www.reuters.com/world/china/china-is-coming-back-timing-couldnt-be-better-2026-04-16/