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Businessweek
Economics

China’s Property Slump Is a Bigger Threat Than Its Lockdowns

The worst decline on record could hold growth below 4% for the rest of the decade.

Shanghai’s modern skyline above the cramped buildings inside the formerly walled Old City.

Shanghai’s modern skyline above the cramped buildings inside the formerly walled Old City.

Photographer: Dave Tacon/Polaris

While global attention is focused on the economic impact of coronavirus lockdowns in Shanghai and Beijing, the slump in China’s housing market is likely to have even more profound implications.

An official index that tracks apartment and house sales has posted year-on-year declines for 11 months straight—a record since China created a private property market in the 1990s. With demand for services and commodities generated by housing construction and sales accounting for about 20% of gross domestic product, that represents a big drag on growth this year.