Guo Shuqing, the People's Bank of China's Party secretary and head of the China Banking and Insurance Regulatory Commission

We must face the problem of the financialization of real estate in some places. In recent years, the leverage ratio of the household sector in some cities in China has risen rapidly and the debt ratio of a considerable proportion of households has reached an unsustainable level. More seriously, around half of the new savings resources are invested in the real estate sector. The excessive financing of the real estate industry not only occupies credit resources of other industries, but also encourages investment speculation in the sector and causes a more serious bubble problem.

History has proved that every country that relies excessively on real estate to achieve and maintain economic prosperity will eventually pay a heavy price. All residents and enterprises relying on blind investment and speculation in real estate to manage money will eventually find that it is really not cost-efficient.