The writer is professor of finance at the Shanghai Advanced Institute of Finance and author of ‘China’s Guaranteed Bubble’

A significant change is on the cards for China’s real estate sector in 2023, according to reports from the country’s recent Central Economic Work Conference — the landmark event which sets the economic course for the coming year. The delegates insisted on one hand that “housing is for living not speculation”, but on the other, emphasised the critical importance of real estate to China’s economic growth. This statement sent real estate developers’ shares multiplying, to the delight of global investors.

But even if the worst time for China’s real estate sector is behind us, the country’s housing bubble remains a serious structural problem. Just this week, a local government finance vehicle in Guizhou province was allowed exceptional approval to delay its loan repayment to banks by 20 years.