Why land and property remain at the core of China's economic transition
Urban home prices have lost their relentless upwards march and local governments, once flush with land revenues, are confronting
fiscal strain
It is tempting to declare this the end of the
land finance era, a long-anticipated turning point that will force Beijing to adopt a more sustainable fiscal model.
Yet such a conclusion would be premature. For all the structural reform rhetoric and policy experimentation, the uncomfortable truth is this: land finance and property-driven growth remain the quiet scaffolding of China's economic system. Their dominance is diminished but their function remains indispensable.
Yet none of these efforts has offered a viable replacement for the entrenched reliance on land and property to anchor local economic development.
At the heart of the issue lies a structural legacy. While its share of government revenue has declined significantly in recent years, the economic reach of the land and construction ecosystem remains vast. The construction sector alone employs over 50 million people, many of them rural migrant workers with few alternatives.
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