Authors
Gerard Dericks, Robert Potts and Ben Caldecott
More than one quarter of China’s housing stock is currently located in ‘resource-based cities’ (RBCs), where the majority of economic activity is derived from the extraction of non-renewable resources. In this report the
authors hypothesise that residential and commercial property assets may become stranded in RBCs as China implements more stringent policies to mitigate the environmental pollution caused by extractive industries. Should this lead to a widespread fall in property prices in RBCs, it could have a profound effect on wider financial stability, as it is estimated that the majority of China’s outstanding debt is in the real estate sector with a material proportion of this tied to RBCs.