China's Housing Crash Erodes Family Wealth as Economy Hits 5% Growth Target

China's Housing Crash Erodes Family Wealth as Economy Hits 5% Growth Target China's economy is facing a critical split: strong export-driven growth is meeting a government-set target, while a prolonged housing market collapse is devastating the savings of millions of ordinary families [53380]. The government is now actively shifting its economic priorities away from its long-standing reliance on real estate speculation [9336]. Official data shows the economy grew by 5% last year, a goal achieved primarily through robust exports of manufactured goods [53380]. However, this headline figure masks a deep domestic crisis. Apartment prices have fallen sharply across the country in a persistent real estate slump [9781][53380]. For most Chinese families, their apartment represents their primary store of wealth, meaning the price crash has erased a significant portion of their savings [53380]. In response, Beijing is implementing a major strategic shift. Officials are deliberately cooling the speculative property market to prevent greater financial risk and are now prioritizing what they term "psychological security" for the public [9336]. The new focus encourages investment in manufacturing and technological innovation, aiming to build a more balanced and sustainable economy less vulnerable to real estate downturns [9336][9781]. This transition is creating a two-speed economy. Sectors like manufacturing and technology are playing a larger role in driving the nation's Gross Domestic Product (GDP) [9781]. Meanwhile, the government is showing reluctance to intervene with a large-scale financial bailout for the troubled property sector, leaving it to adjust without major central support [9781]. The result is a profound challenge for policymakers. The economy is being propped up by foreign demand, while weak consumer confidence, stemming from lost housing wealth, continues to suppress domestic spending [53380]. The success of the pivot from property to industrial and technological investment will determine the long-term stability of the world's second-largest economy. China's Growth Hits 5%, But a Housing Crash Erodes Family Wealth China Shifts Focus from Property to "Peace of Mind" China's Property Slump Persists as Economic Priorities Shift