China’s Housing Rescue Falls Short in City That Signaled the Crisis

As President Xi Jinping tries to defuse a property slump that represents the greatest threat to China’s economy, rescue efforts in a city that presaged the crisis are failing to spur a rebound. Zhengzhou, where Foxconn Technology Group runs the world’s biggest iPhone factory, was among the first in the nation to see its housing market crash. Since 2022, the local government has adopted an array of measures to revive the market, from loans to developers to complete unfinished projects, offers to buy their surplus units and turn them into affordable housing, and even payments to residents who replace outdated homes.

Zhengzhou has tried so many ideas that officials from other cities have been flocking there to study its model. And yet home prices in Zhengzhou and the rest of China keep falling. A recent visit by Bloomberg Businessweek to the city revealed evidence of the state intervention—cranes whirring again along the skyline thanks to government loans for long-stalled developments and people collecting keys to move into an affordable housing project—but would-be buyers remained on the sidelines, convinced that prices had far from bottomed out. The public housing push, Zhengzhou’s boldest effort, isn’t making a dent in the oversupply of homes, because it’s too difficult for the local government to persuade developers to sell apartment complexes at enough of a discount to make the economics work.