Once a Symbol of China’s Growth, Now a Sign of a Housing Crisis

The rows of towering buildings crowding the banks of the Gan River are a testament to the real estate boom that transformed Nanchang in eastern China from a gritty manufacturing hub to a modern urban center, the New York Times reported. Now those skyscrapers are evidence of something very different: China’s real estate market in crisis, reeling after years of overbuilding. As China’s economy prospered the last two decades, Nanchang, the capital of Jiangxi Province, erected sweeping apartment complexes and gleaming office towers to meet the increasing demand for homes and workplaces. It pursued urban expansion with a motto that underscored its growth-at-all-costs approach: “Advance eastward, extend southward, expand westward, integrate northward, and prosper in the middle.” But the country’s prolonged real estate slump has exposed cracks in cities, like Nanchang, where years of nonstop building have created too much supply. By one measure, nearly 20 percent of homes in Nanchang sit vacant — the highest rate among 28 large and midsize Chinese cities. Nanchang illustrates the enormous challenges policymakers face in trying to revive China’s economy. During past downturns, Beijing turned to real estate and infrastructure spending to jump-start the economy. But this time, it won’t be an easy fix. Developers are saddled with debt, cities are teeming with empty dwellings, and local government finances are depleted from years of paying for Covid testing. Read more.