China Risks Hard Landing of Housing Sector, Ex-Official Warns

China risks a hard landing in the real-estate sector and needs to step in to resolve both the liquidity crunch for developers and the recent boycotts of mortgage payments, a former official said.

“Preventing the risk of a ‘hard landing’ in the property sector should be high up among our priorities and given serious attention,” Zhu Guangyao, who was vice finance minister between 2010 and 2018, said during an online seminar Monday. Local governments need to handle the boycotts well and “be strictly on guard to prevent it from spreading and triggering a banking crisis,” said Zhu, who is now a counsellor to the State Council, which is China’s cabinet.