Many elderly Chinese suffer from what they call the “three highs”: those of blood pressure, blood sugar and cholesterol. According to some economists, such as Zhang Bin of the Chinese Academy of Social Sciences, the property market suffers from “three highs” of its own. Prices are lofty, especially in the peripheries of big cities. The debt of property developers is too high, because they must hold expensive illiquid assets like land. And households sink too much wealth into property, because they see it as a lucrative investment rather than a place to live.
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In an aggressive attempt to cure these maladies, China’s policymakers have created several others. The flow of finance to property developers has slowed abruptly since the government imposed limits on their borrowing in 2020, forcing dozens into…