Xi's Shanghai Tour Offers No Relief for China's Housing Crisis

President Xi Jinping visited Shanghai in mid-July, attending the opening ceremony of an international AI conference and also focusing on the deepening real estate market slump. However, during his local inspections and meetings with officials, he merely expressed concern for citizens' living standards, offering no new solutions or concrete proposals for the housing crisis. The real estate market is a cornerstone of China's economic growth model. Economists point out that falling housing prices have led to a collapse in property values, which constitute over 70 percent of Chinese citizens' wealth, consequently dampening consumption. Past reports have indicated the authorities' sensitivity to the market's volatility, such as the temporary suspension of the publication of housing sales statistics that reflect the real estate market's deterioration. The real estate market slump is also evident in sluggish new home sales and the estimated 90 million unfinished or vacant apartments nationwide. Xi's choice of Huangpu District in Shanghai for his inspection tour, a historically significant area where the Chinese Communist Party was founded, is seen as symbolic of the Party's responsible governance. However, beyond "sympathetic words" about living standards, no specific measures for resolution were presented. The Politburo meeting acknowledged the "need to attach great importance to the difficulties and challenges in economic performance," but the proposed solution appeared to be a continuation of existing policies, suggesting "giving full play to the effectiveness of all existing policies." The collapse of the property bubble, following the reintroduction of home ownership in the 1990s, has been a tragedy for hundreds of millions of Chinese citizens who have lost their homes or are struggling with mortgage payments. The decline of this prime economic driver poses a risk to the financial health of ordinary citizens, and a resolution from the leadership remains elusive. Information Source: The Diplomat Indonesia