Here is the study: https://www.tandfonline.com/doi/full/10.1080/02673037.2024.2334797

A new study found that the Chinese property market became dominated by a small number of large firms who used their ability to access debt and land at low cost to create an oligarchic market.

The investigation led by Lan Deng, professor of planning at the Michigan University in the US, argues that major companies followed the same high-risk, high-growth business strategy meant they were all vulnerable to an economic shock.

In the event, the default of Evergrande in 2021, set off a progressive collapse in its rivals and led to China’s continuing property crisis.

Published in the journal Housing Studies, the paper found that there were about 10,000 registered developers in China, but that the top five accounted for 30% of domestic housing supply in 2018, compared with 13% in the much smaller US market.

Evergrande, which once built as much as 72 million sq m of property in a year, filed for bankruptcy protection in August 2023.

Country Garden, whose annual housing production was about twice the size of Evergrande’s, followed suit two months later.

Another factor was the use of land auctions. In China, state land is sold to the highest bidder, and the large developers always had the resources to outbid smaller rivals.

China Daily notes that the property sector remains critical for the Chinese economy. It points out that, even after the collapse of the two largest companies, it still contributes 20% of fiscal revenue, stores 70% of household wealth, generates 24% of GDP and accounts for 25% of bank loans.