## People’s Republic of China: Selected Issues

_IMF Staff Country Reports, February 9, 2024_

## Source details

**Canonical URL:** [People’s Republic of China: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/02/08/peoples-republic-of-china-selected-issues-544651)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/02/08/peoples-republic-of-china-selected-issues-544651/index.md)
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## Bibliographic details
- Published: February 9, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400266966.002

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### Overview and central findings
- The Selected Issues paper analyses China’s property sector transition.
- The Chinese authorities have taken resolute actions to address the risks from the property sector since the start of the pandemic.
- The key challenge is to smooth the transition of the sector to a smaller, more sustainable size amid:
  - unresolved financial distress among developers;
  - weakened homebuyer confidence;
  - a backdrop of large inventories and structurally declining demand.
- New housing construction is set to fall significantly in the coming decade.
- Drivers of the projected decline in construction:
  - a likely slowdown in urban household formation;
  - reduced urban redevelopment activities;
  - an expected gradual contraction in the overall population;
  - a significant drag from excess developer inventories and rising secondary market supply of previously vacant homes.

### Projections and analysis
- The paper projects the path of real estate investment in China over the medium term.
- Construction faces substantial downward pressures from both demand-side and supply-side factors (see Overview and central findings).
- Excess developer inventories and increasing supply on the secondary market of previously vacant homes act as a significant drag on new construction activity.

### Policy priorities and recommendations
- Expedite the resolution of underlying supply-side imbalances, most importantly by restructuring nonviable developers.
- Support and de-risk surviving developers to preserve market functioning and complete viable projects.
- Take steps to contain the build-up of risks in the property market to prevent further financial distress and transmission to the broader economy.
- The paper considers policies that will help ease the sector’s transition to a smaller, more sustainable size.

### Publication metadata and topics
- Publication date: February 9, 2024
- Pages: 58
- Volume: 2024
- Issue: 050
- Series: Country Report No. 2024/050
- DOI: https://doi.org/10.5089/9798400266966.002
- Stock No: 1CHNEA2024002
- ISBN: 9798400266966
- ISSN: 1934-7685
- Subject tags: Financial statements, Housing, International organization, Monetary policy, National accounts, Personal income tax, Public financial management (PFM), Revenue administration, Tax incentives, Taxes
- Keywords: Asia and Pacific, Financial statements, Global, Housing, labor income taxation, LG debt, LG finance, Personal income tax, real estate slump, Tax incentives, wealth taxation

*Source: People’s Republic of China: Selected Issues (IMF Staff Country Report No. 2024/050).*

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## Content in this bundle

- **People’s Republic of China: Selected Issues; IMF Country Report No. 24/50; December 19, 2023**
  - [People’s Republic of China: Selected Issues; IMF Country Report No. 24/50; December 19, 2023 (Markdown version)](/-/media/files/publications/cr/2024/english/1chnea2024002.pdf.md){rel="alternate" type="text/markdown"}
  - [People’s Republic of China: Selected Issues; IMF Country Report No. 24/50; December 19, 2023 (PDF)](/-/media/files/publications/cr/2024/english/1chnea2024002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/02/08/peoples-republic-of-china-selected-issues-544651_