Real Estate Crash Weighs on China’s Economic Growth

China's economy is facing challenges due to a real estate market crash that began four years ago, impacting household savings and local government revenue. New home sales have plummeted, and apartment prices are declining, leading to reduced consumer spending, with retail sales experiencing their worst performance since the pandemic. Despite these issues, China's National Bureau of Statistics reported a 5% economic growth in 2025, driven by a boom in exports and a record trade surplus. However, some Western economists estimate the actual growth to be significantly lower, around 2.5 to 3 percent. The real estate sector's slowdown, which previously accounted for a quarter of China's economy, is largely responsible for the lackluster economic performance.

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