@DesmondShum: China’s Property Crisis Is Becoming Everyone’s Industrial Crisis Isn’t this crazy? China’s property collapse is now hur…

China’s Property Crisis Is Becoming Everyone’s Industrial Crisis Isn’t this crazy? China’s property collapse is now hurting workers around the world. The chain is straightforward. For two decades, real estate development drove a huge part of China’s economic growth. Property absorbed household savings, bank credit, local-government ambition, and fiscal revenue. Land sales funded infrastructure. Rising home prices made households feel wealthier. Developers, local officials, banks, contractors, and consumers were all tied into the same machine. Then the machine broke in 2021. Property prices fell. Household wealth shrank. Consumer confidence weakened. Local-government land-sale revenue collapsed. The economy slowed. Families responded rationally: they stopped spending and started saving. China now has a vast accumulation of household deposits. By September 2025, household deposits had reached around RMB165 trillion, or 122% of GDP, according to the World Bank. Latest estimates now put the number closer to RMB180 trillion — roughly US$25 trillion. That is not a sign of strength. It is a sign of fear. People are not saving because they are optimistic. They are saving because property no longer feels safe, jobs no longer feel secure, and the future looks bleak. The state’s response has been to push interest rates lower. Major Chinese banks have cut one-year fixed deposit rates toward 1%. The intention is obvious: punish idle savings, lower funding costs, and push capital back into the economy. But in China, capital does not flow freely to the best market opportunity. It flows where the Party points. And under Xi, the Party is pointing at manufacturing. “New productive forces” — 新质生产力 — has become the new master slogan. Since property can no longer deliver growth, jobs, fiscal revenue, and political confidence, Beijing is trying to build a new growth engine through EVs, batteries, solar, chips, robotics, industrial machinery, and advanced manufacturing. Chinese capital controls make the problem worse. Capital is trapped inside a slowing economy. If households will not consume, and money cannot easily leave the country, then the system has to find another outlet. That outlet is state sanctioned investment in manufacturing. The IPO data captures the shift. Since the beginning of 2025, Shanghai, Shenzhen, and Beijing have listed roughly 177 new companies, and around 95% were manufacturing-related, according to the transcript. The Beijing Stock Exchange alone listed 55 new companies; 54 were manufacturers. The problem is not that China manufactures. China should manufacture. The problem is that Beijing is trying to solve a demand crisis with another investment drive and another supply-side buildup. That is where China’s domestic property crisis becomes a global industrial problem. China’s property bust is not just a domestic balance-sheet crisis. It is being converted into a global manufacturing shock. China’s property bust is not just a domestic balance-sheet crisis. It is being converted into a global manufacturing shock. Beijing broke the housing machine. Now it wants the rest of the world to absorb the excess output from its expanding factory floor — and call the loss of factories and jobs “free trade.”