Editor's note:
China’s second largest property developer Evergrande made headlines in recent years for getting into a severe debt crisis, with liabilities of over US$300 billion. Evergrande is just one example of risks in China’s highly leveraged property sector,a sector which once performed as China’s economic engine.
In just a few decades, the immense size and speed of China\’s urbanization have exceeded the boldest predictions of the reformers who initiated it. The big shift in China’s urbanization policies came in the late 1980s, when the model of financing China’s industrialization and urbanization through agricultural accumulation was determined to be unsustainable.
This led to China’s 1994 tax sharing reform, which gave local governments the initial incentives to develop a “land finance system, which later led to China’s real estate boom. This reform adjusted the tax distribution between the central and local governments, so that local governments were able to accumulate original capital at an unprecedented speed.
Without land finance, many of the problems of China’s economy, such as soaring housing price, wouldn’t have existed. On the other hand, China’s rapid development wouldn’t have occurred either, as “land finance” provided a much-needed funding solution for China in the 90s.
Against this backdrop, we debate this question:
Will the real estate sector remain the driver of China's economic growth?
- Yes
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Justin-Yifu-Lin.jpg)
Director of the Institute of New Structural Econimics,
Peking University
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Zhang-Yuewen.jpg)
Director of Capital Market Research Department, Institute
of Finance,Chinese Academy of Social Sciences
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Xu-Gao.jpg)
Chief Economist of BOC Securities and Director of China Chief Economist Forum
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Yin-Yanlin.jpg)
Chief Economist of BOC Securities and Director of China Chief Economist Forum
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Deng-Haiqing.jpg)
Vice President and Chief Investment Officer of AVIC Fund
- No
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Shen-Minggao.jpg)
Guangfa Securities:China's economic growth driven
by real estate is unsustainable.
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Xing-Ziqiang.jpg)
Chief Economist, Morgan Stanley China
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Wang-Tao.jpg)
Chief China Economist,Head of Asia Economic Research,
UBS:Real estate will not be the most important engine of economic
growth in the future.
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Ding-Shuang.jpg)
Chief Economist of Greater China and North Asia, Standard Chartered Bank and Director of China Chief Economist Forum: “ Real estate investment will be less of a drag on the economy, but cannot yet become an engine of growth.”
![](https://wp.thechina.academy/wp-content/uploads/2023/03/Wang-Xiaolu.jpg)
deputy director and researcher of the National Economic Research Institute of China Reform Foundation and executive director of the China Society for Economic System Reform.