The rotten tail of China’s property bust
The Economist
February 23, 2026
AI-Generated Deep Dive Summary
China’s property sector is grappling with a severe downturn, as evidenced by half-finished buildings across the country. In cities like Zhoukou, developers such as Zhongao have defaulted, leaving residents in skeletal structures and causing financial losses for buyers. This crisis has led officials to adopt measures that distribute economic pain widely, reflecting broader challenges in China’s real estate market.
The property boom of the past decade has left a trail of unfinished projects and bankruptcies. In Zhoukou, Zhongao’s ambitious residential complex, once promising “classic Chinese living,” now stands as a testament to the sector’s collapse. The developer’s bankruptcy and its boss’s imprisonment highlight the systemic risks that have emerged.
The ripple effects extend beyond individual developers, impacting local economies and national growth. With property investment contributing significantly to China’s GDP, the slowdown has cooled economic activity, raising concerns about stability and prompting policymakers to implement measures aimed at stabilizing markets.
This situation underscores the broader implications for China’s economy, particularly as global demand wanes and domestic consumption struggles to fill the gap. The property bust not only affects investors but also raises questions about the government’s ability to sustain growth through alternative means.
For businesses, understanding these dynamics is crucial, as they highlight vulnerabilities in China’s economic structure and the potential for further market corrections.
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Originally published on The Economist on 2/23/2026