Speaker: Andrew Collier, Senior Fellow, Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School

From 1992 until the boom ended in 2021, Chinese home property sales grew at an average rate of 25 percent per year. China was awash in new construction — often in the middle of empty fields far from city centers. In the United States and Europe real estate generally is less than 10 per cent of fixed asset investment. It was much higher in China. Real estate investment grew rapidly from 4 per cent of GDP in 1997 to 15 per cent of GDP in 2014, accounting for 15 per cent of fixed asset investment and 15 per cent of urban employment. In some cities it topped 40 percent of local investment. China has built more housing per person than any major European country even though its GDP per capita is only one-third as high.

However, concerned about a speculative bubble, the leadership crashed the market in 2020 with a new set of rules, the “Three Red Lines,” forcing developers to halt or slow construction. As a result, China has lost its top contributor to economic growth and is struggling to replace it. What does this mean for geopolitics? Slowing Chinese growth will weaken the country’s global position militarily and politically and force the leadership to make hard choices about economic allocation.

This study group / discussion is open to all HUID holders. Registration is not necessary.