A crucial aspect of ‘socialism with Chinese characteristics’ is the absence of risk in key assets, namely real estate. As I have previously written, Chinese policy to increase household wealth revolves around strategic asset inflation. There is an explicit idea in Chinese society that certain asset classes cannot lose value and value must always increase.

The Chinese stock market is one such asset class. This article explains how, in 2015, China set a floor for its stock market by ordering brokers to not sell below 4,500 points. The stock market was to fall no lower. It worked. Life moves on. Asset inflation continues.

 In Beijing, homes that went for an average of around 4,000 yuan (US$580) per square metre in 2003 are now above 60,000 yuan (US$8,600) a square metre, according to property price data provider creprice.cn

The key questions should then be:

1.) Can this go on forever?

2.) What happens when it stops?

Luckily there is some insight. People have been protesting drops in real estate prices for years. Here is a good article from the SCMP on the matter. Here is what a real estate protest looks like (it is really worth watching).

Something that foreign pundits regularly misunderstand about China is the amount of protests that happen. They do happen and are often allowed to happen. For example, here is a good video of recent veteran protests. However, it is worth watching how the expectation of constant growth interacts with a slowing -healthy or otherwise- Chinese economy.