Part 6/14:
The property downturn is central to this slowdown. Developer sales have plummeted by as much as 80% since 2021, with new home sales declining by 40% recently. This crisis is complicated further by the fact that much of China’s developer debt is tied up in unfinished projects or unpaid bills—not solely financial institutions, but also contractors and other stakeholders. Local governments, which rely heavily on land sales for revenue—accounting for nearly 38% at the peak—are deeply interconnected with this cycle, fueling ballooning debt and fiscal instability.