China has recently mandated large state-owned enterprises to acquire inventory housing worth CNY 300 billion in an attempt to absorb the excess supply of over 400 million square meters. However, Assistant Research Fellow Guo-Chen Wang of the First Research Division at the Chung-Hua Institution for Economic Research points out that this measure merely shifts the responsibility for the housing market downturn to state-owned enterprises. After the acquisitions, state enterprises still face the problem of “who to sell to,” and they tend to cherry-pick only properties with residual value, failing to truly resolve the enormous inventory pressure.
Guo-Chen Wang further analyzes that to effectively alleviate housing market and corporate debt risks, the scale would need to reach at least several trillion yuan. However, with only CNY 300 billion currently being invested, this is likely just a drop in the bucket, insufficient to reverse the overall decline.
Author: CIER Editorial Team Date: August 20, 2025