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China’s property slump is far from bottoming. But Beijing is prioritizing tech growth

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10 months ago

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A new residential complex under construction in Hangzhou, Zhejiang Province, China on October 20, 2025.

Cfoto | Future Publishing | Getty Images

BEIJING — Chinese policymakers are unlikely to shore up the country’s struggling real estate sector, analysts told CNBC, even as the housing slump drags on economic growth.

The assessment comes as China’s top leaders, called the Central Committee, are due to wrap up a four-day meeting Thursday, which will outline priorities for the next five years.

In Beijing’s view, the property sector’s drag on growth has eased, while technological development is a more urgent priority in the current geopolitical landscape, said Ning Zhu, author of “China’s Guaranteed Bubble.” To him, that means Beijing is unlikely to enact significantly stronger real estate support.

After years of concern over property developers’ debt that led to Beijing’s crackdown, Chinese state media said earlier this month that “risks in key areas have been effectively prevented and mitigated,” according to a CNBC translation. The piece was part of a series of articles highlighting achievements over the past five years while highlighting Beijing’s push to promote opportunities in tech.

That underscores further divergence between Beijing’s view and that of most analysts.

“The government believes the property market is bottoming,” Zhu said. “I believe it is a gradual process and may take more time before reaching the bottom.”

China's Fourth Plenum expected to focus on tech as tensions with U.S. grow

Recent data underscores the divide between Beijing’s optimism and market reality. China’s Statistics Bureau on Monday said high-tech manufacturing grew by 9.6% in the first three quarters of the year compared to the same period in 2024, outpacing the 6.2% growth in overall industrial production.

However, real estate investment fell 13.9% in the first three quarters from a year earlier, extending the sector’s decline through September. The decline pushed fixed-asset investment into negative territory — the only such decline on record, excluding the Covid-19 pandemic.

That means that just over a year since Beijing called for a “halt” in the property sector’s decline, there are still few signs of a turnaround.

It’s “hard to say when” real estate will bottom, said Lulu Shi, a director at Fitch Ratings. “The overall population, demographics and the employment situation and housing market inventory, they are all worsening.”

China’s falling birth rate points to weaker housing demand in the future, while uncertainty about jobs and income growth weighs on homebuyer sentiment in the near term.

Falling home prices

The slide in property prices over roughly the last two years is also weighing on homebuyer sentiment, reversing decades of gains that once fueled heavy speculation in the property market.

The weighted average for new home prices in September fell 2.7% from the prior month on an annualized basis, according to a Goldman Sachs analysis of official data from China’s 70 largest cities published Monday. That was steeper than the 2.1% drop seen in August.

Prices of “secondary” homes, which have already been sold once, have plunged by a far steeper 5% to 20% over the past year, Goldman said, citing a mix of official and third-party figures.

Looking ahead, Beijing is unlikely to put much emphasis on property policy, whether in additional support or discouraging real estate speculation, said Bruce Pang, adjunct associate professor at CUHK Business School.

He noted that China’s multi-year plans, such as those for the next five years, tend to focus on new approaches for growth.

Easing measures introduced in August, such as looser restrictions on multiple property purchases in major cities, have done little to lift sentiment. The policy changes mostly applied to the city outskirts rather than the most attractive downtown areas.

Citing that weaker-than-expected policy support, S&P Global Ratings earlier this month forecast property sales to fall 8% this year, worse than earlier estimates. They expect another drop of at least 6% next year as a market bottom remains elusive.

Moody’s Ratings also predicts China home sales to decline by single digits over the next 12 to 18 months.

This forecast is based on fading demand from buyers who had anticipated policy easing, said Daniel Zhou, an assistant vice president and analyst at Moody’s Ratings. He said the property market should gradually stabilize over the longer term under existing policy measures.

Broader economic impact

The real estate slump continues to weigh heavily on China’s economy, even as the sector’s role has shrunk from more than a quarter of output. As property sales have roughly halved in just a few years, manufacturing and exports have helped offset the decline.

“China’s economy has remained under the 2-speed mode, with consumption/property as the weak track and exports/manufacturing as the strong track,” Larry Hu, chief China economist at Macquarie, said in a note. “The pattern will continue until policymakers could no longer rely on external demand to drive growth.”

Chinese exports have remained unexpectedly strong so far this year, with 8.3% growth in September from a year ago, despite a 27% plunge in shipments of goods to the U.S.

For real estate, “it is very hard to see a trend of growth,” Shi said. “We believe there will be more policies, but it’s not likely that one policy can change the entire situation.”

Eventually, once the decline in home prices eases, she expects more buyers to gradually return to the housing market.

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Private Credit Expansion and Regulatory Oversight in 2026 Capital Markets

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5 days ago

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August 9, 2026

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The global private credit market has solidified its role as a fundamental pillar of enterprise finance, expanding rapidly across middle-market lending, asset-backed finance, and infrastructure financing. As non-bank financial institutions capture a larger share of corporate debt origination, global regulatory bodies are increasing oversight to evaluate market transparency and systemic risk interconnections.

Growth Drivers in Direct Lending
Direct lending platforms have continued to attract substantial institutional allocations from pension funds, sovereign wealth entities, and insurance companies seeking attractive risk-adjusted yields. Private debt funds offer corporate borrowers customized financing structures, faster execution timelines, and confidentiality compared to syndicated loan markets.

In 2026, private credit managers are increasingly financing larger corporate transactions, providing multi-billion-dollar credit facilities for buyout deals and corporate restructurings. The flexibility of private debt contracts—featuring unitranche pricing and tailored covenant packages—has made direct lending the preferred capital source for middle-market enterprise sponsors.

Regulatory Scrutiny and Systemic Risk Assessment
The rapid growth of non-bank intermediation has drawn heightened scrutiny from financial regulators in North America and Europe. Because private debt agreements are negotiated privately without public exchange disclosures, central banks are evaluating potential vulnerabilities related to asset valuation consistency and fund liquidity profiles.

Regulatory agencies are introducing guidelines aimed at improving reporting standards for private investment vehicles managing institutional assets. Key focus areas include monitoring leverage ratios within private credit funds and evaluating indirect credit exposures between commercial banking institutions and private debt funds.

Navigating Elevated Refinancing Costs
With benchmark interest rates remaining elevated, private debt borrowers face higher debt service obligations on floating-rate credit facilities. Financial advisory firms report an increase in proactive liability management strategies, including payment-in-kind (PIK) interest options, equity infusions from sponsors, and covenant modifications.

Private credit managers with deep operational capabilities are actively working alongside portfolio companies to optimize working capital and maintain cash flow coverage ratios during periods of higher borrowing costs.

Key Financial Takeaways
1. Mainstream Asset Class: Private credit has expanded beyond niche alternative asset status into a core corporate finance solution.
2. Enhanced Transparency Standards: Regulatory frameworks are evolving toward greater disclosure requirements for private debt managers.
3. Proactive Risk Management: Lenders and sponsors must prioritize debt sustainability and active portfolio monitoring amid high benchmark rates.

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Finance

Venture Capital and Startup Valuations in 2026: Focus on Unit Economics and Sustainable Growth

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1 week ago

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August 5, 2026

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The global venture capital (VC) ecosystem is operating under a disciplined investment framework in 2026. Following years of valuation adjustments and shifting liquidity environments, venture capital firms and private equity investors are prioritizing proven unit economics, positive cash flow pathways, and capital efficiency over rapid, unconstrained user acquisition.

The Shift Toward Disciplined Startup Valuations
Early-stage and growth-stage startup valuations have stabilized at sustainable historical averages. Venture capital partners are conducting rigorous due diligence processes before deploying capital, scrutinizing gross margins, customer acquisition costs (CAC), net revenue retention (NRR), and lifetime value (LTV) metrics.

While total capital deployed remains robust, seed and Series A funding rounds are taking longer to finalize. Founders are expected to demonstrate clear product-market fit and defensible intellectual property rather than relying on top-line revenue projections unsupported by strong underlying economics.

M&A Activity and Liquidity Solutions
The market for venture-backed exits is seeing renewed momentum through strategic mergers and acquisitions (M&A) and secondary market liquidity facilities. Established corporate enterprises are acquiring high-performing technology startups to integrate proprietary artificial intelligence models and specialized software solutions into their product ecosystems.

Simultaneously, secondary market transactions have become an essential liquidity mechanism for early employees and institutional investors. Specialized secondary funds are purchasing pre-IPO shares at discounted valuations, providing liquidity opportunities while companies remain private for longer durations.

Sector Allocation: Deep Tech, Clean Energy, and Enterprise Automation
Venture capital investment is heavily concentrated in deep technology and capital-intensive engineering sectors. High-growth investment themes include:
– Next-Generation Semiconductors: Hardware startups designing specialized AI processors and energy-efficient microchip architectures.
– Clean Technology: Battery chemistry innovations, carbon capture solutions, and grid-scale energy storage startups.
– Enterprise Process Automation: Software platforms that automate complex workflows in healthcare, financial services, and industrial logistics.

Key Insights for Entrepreneurs and Investors
1. Prioritize Capital Efficiency: Startups focused on achieving operational profitability receive higher valuation premiums from institutional investors.
2. Strategic Exit Planning: Corporate M&A is serving as a primary exit route for venture-backed startups navigating prolonged IPO windows.
3. Focus on High-Moat Technologies: Deep tech and proprietary software architectures are securing the majority of growth-stage capital allocations.

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Finance

The Evolution of Digital Payments: Cross-Border Settlement and Central Bank Digital Currencies in 2026

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1 week ago

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August 5, 2026

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The infrastructure supporting global commerce is undergoing a major technological upgrade as real-time digital payment rails, cross-border settlement solutions, and Central Bank Digital Currency (CBDC) pilot programs achieve widespread commercial adoption. Financial institutions and fintech developers are reimagining payment processing to eliminate friction, lower transaction fees, and accelerate settlement speed.

Transforming Cross-Border Settlement Infrastructure
For decades, international corporate payments relied on legacy correspondent banking networks characterized by multi-day settlement delays, opaque fee structures, and high foreign exchange markups. In 2026, modern cross-border payment networks are enabling near-instantaneous settlement for international trade transactions.

Financial technology platforms are leveraging distributed ledger technology and real-time gross settlement (RTGS) interconnections to settle transactions in seconds. International trade participants benefit from reduced working capital requirements and minimized foreign exchange volatility risks during cross-border transfers.

Commercial Expansion of Central Bank Digital Currencies
Central banks representing major global economies are advancing CBDC initiatives from research phases into active commercial deployment. Wholesale CBDCs—designed specifically for interbank settlement and financial institution clearing—are demonstrating substantial efficiency gains in domestic and international transactions.

At the retail level, several nations have introduced public digital currency options alongside existing commercial banking networks. These sovereign digital payment channels aim to expand financial inclusion, lower consumer transaction fees, and improve the efficiency of government-to-citizen financial disbursements.

Open Banking and Embedded Finance Ecosystems
Alongside settlement infrastructure upgrades, open banking regulations and embedded finance frameworks are transforming merchant-consumer interactions. Commercial businesses across retail, travel, and business-to-business (B2B) services are integrating seamless payment APIs directly into their customer software interfaces.

Through open banking frameworks, consumers can initiate secure bank-to-bank payments without relying on traditional credit card networks, significantly reducing merchant processing fees. Integrated Buy-Now-Pay-Later (BNPL) options and point-of-sale credit facilities continue to expand, driving higher conversion rates for digital commerce platforms.

Strategic Financial Takeaways
1. Treasury Optimization: Corporate treasurers should leverage instant cross-border payment platforms to minimize liquidity buffers and foreign exchange exposure.
2. CBDC Integration: Financial institutions must prepare internal core banking systems to interface with emerging wholesale CBDC payment rails.
3. Merchant Fee Reduction: Enterprise merchants can lower payment processing overhead by adopting account-to-account (A2A) open banking checkout solutions.

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