The dangerous bubble which for years has been brewing in China's housing market is bursting, changing the country's economy in a way that's still hard to predict, even for economists.The property sector has almost single-handedly driven the country's explosive growth in the past few decades, but as the mess created by years of risky investments unravels, only the tight control of the Chinese Communist Party has prevented an absolute, overnight catastrophe.
'In the fall of 2020, the Chinese government cracked down on this kind of investments, putting restrictions on the amount of debt developers could collect. Banks went even further, cutting off financing for developers.'It was the thing that burst the bubble, because that's when people realized that the model of the property developers was broken,' Magnus said.'Then developers started to run into financial difficulties,' he added.
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