There are two reasons why it is a problem for China.
First is that housing investment is a main way that Chinese people save for retirement. So if the market adjusts, you can have a lot of elderly Chinese who no longer have their nest eggs.
Second is that most Chinese municipal budgets are based on developing land. Without demand for new housing, Chinese cities are going to need bailouts from the national government.
Imagine framing it as a bad thing… only happens in countries that are western neoliberal democratic capitalist!
There are two reasons why it is a problem for China.
First is that housing investment is a main way that Chinese people save for retirement. So if the market adjusts, you can have a lot of elderly Chinese who no longer have their nest eggs.
Second is that most Chinese municipal budgets are based on developing land. Without demand for new housing, Chinese cities are going to need bailouts from the national government.