Chinese leader Xi Jinping has no intention of letting an economic crisis go to waste
No, not the “zero-Covid” nightmare still challenging Xi Jinping’s Communist Party. The reference here is to Xi’s determination to stabilize a cratering property sector, which can generate as much as 30% of gross domestic product (GDP). The latest sign: Team Xi’s push to increase the scope of real estate investment trusts, or REITs, as a way to stabilize and modernize the sector.
Xi’s U-turn on Covid lockdowns will surely ease pressure on highly indebted developers (and now Hong Kong, too). So will the fiscal and monetary stimulus Beijing is pumping into Asia’s biggest economy. But lacking in recent years has been clear reform wins to increase productive investment options in real estate, making the sector susceptible to frothy boom-bust cycles.