Chinese property ‘not heading for collapse’

Concerns have been growing that China’s property bubble is bursting, but the deputy managing director said the economy “is still, and has been for many years, facing a housing shortage”.

“The government has logically taken into account this present and future shortage and plans to build 10m homes a year, prioritising and subsidising social housing,” he said.

“The construction sector is therefore not going to collapse and the best players in the sector will get out while the going is good.”

Mr Le Coz said that China was now in a position to be able to overcome its problems of a “sometimes doubtful or inappropriate allocation of capital”, and inflationary pressures which had lasted longer than he had expected.

“What seems to be important, and is perhaps difficult to conceive from Europe, is that in China, these problems will be resolved by growth and not by an accumulation of austerity measures,” he said.