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Assetization: The Chinese Path to Housing Financialization

Author

Listed:
  • Fulong Wu
  • Jie Chen
  • Fenghua Pan
  • Nick Gallent
  • Fangzhu Zhang

Abstract

Although the literature on the financialization of housing pays most attention to mortgaged and securitized homeownership and the penetration of capital into subsidized rental housing, forms of financialization are varied. In China, housing commodification and privatization has underpinned a growth in homeownership. One of the outcomes of financialization of housing is the transformation of owner-occupied housing into a financial asset for households’ wealth. Despite a relatively low level of residential mortgage lending in China, both the absolute volume of mortgages and the proportion of gross domestic product they represent are now rising. Housing value appreciation has driven a significant increase in the financing of housing consumption through multiple channels. This article examines these channels and suggests that the financialization of housing in China is a critical part of the country’s overall development model. It is further argued that the root of housing financialization in China is not mortgage securitization but the creation of owner-occupied housing as a financialized asset to propel the wider financialization of the Chinese economy in the context of state-controlled financial environment.

Suggested Citation

  • Fulong Wu & Jie Chen & Fenghua Pan & Nick Gallent & Fangzhu Zhang, 2020. "Assetization: The Chinese Path to Housing Financialization," Annals of the American Association of Geographers, Taylor & Francis Journals, vol. 110(5), pages 1483-1499, September.
    • Handle: RePEc:taf:raagxx:v:110:y:2020:i:5:p:1483-1499
    DOI: 10.1080/24694452.2020.1715195
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    Citations

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    Cited by:

    1. Yuting Cao & Ran Liu & Wei Qi & Jin Wen, 2020. "Urban Land Regulation and Heterogeneity of Housing Conditions of Inter-Provincial Migrants in China," Land, MDPI, vol. 9(11), pages 1-21, November.
    2. Chen, Jie & Wu, Fulong & Lu, Tingting, 2022. "The financialization of rental housing in China: A case study of the asset-light financing model of long-term apartment rental," Land Use Policy, Elsevier, vol. 112(C).
    3. Natacha Aveline-Dubach, 2020. "The financialization of real estate in megacities and its variegated trajectories in East Asia [La financiarisation de l'immobilier dans les mégapoles d'Asie orientale et leurs trajectoires différe," Post-Print halshs-02517518, HAL.
    4. Yunpeng Zhang, 2022. "TEMPORAL POLITICS AND INJUSTICE IN MEGA URBANIZATION: Lessons from Yangzhou, China," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 46(4), pages 558-575, July.
    5. Wu, Fulong, 2022. "Land financialisation and the financing of urban development in China," Land Use Policy, Elsevier, vol. 112(C).
    6. S. G. Sternik & N. B. Safronova, 2021. "Financialization of Real Estate Markets as a Macroeconomic Trend of the Digital Economy," Studies on Russian Economic Development, Springer, vol. 32(6), pages 676-682, November.
    7. Yang, Jian & Tong, Meng & Yu, Ziliang, 2021. "Housing market spillovers through the lens of transaction volume: A new spillover index approach," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 351-378.
    8. Michael Goldman, 2023. "Speculative urbanism and the urban-financial conjuncture: Interrogating the afterlives of the financial crisis," Environment and Planning A, , vol. 55(2), pages 367-387, March.
    9. Hung Dao Vo, 2023. "Diasporic capital and the financialisation of housing in Ho Chi Minh City," Urban Studies, Urban Studies Journal Limited, vol. 60(13), pages 2669-2685, October.
    10. Oguzhan Cepni & Rangan Gupta & Yigit Onay, 2022. "The role of investor sentiment in forecasting housing returns in China: A machine learning approach," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(8), pages 1725-1740, December.
    11. Gertjan Wijburg, 2023. "Commodifying Havana? Private accumulation, assetisation and marketisation in the Cuban metropolis," Urban Studies, Urban Studies Journal Limited, vol. 60(16), pages 3216-3232, December.
    12. Su, Xing & Qian, Zhu, 2022. "Neoliberal financial governance and its transformation under real estate boom and bust: The case of Ordos City, China," Land Use Policy, Elsevier, vol. 112(C).
    13. Chen, Jie & Wu, Fulong, 2022. "Housing and land financialization under the state ownership of land in China," Land Use Policy, Elsevier, vol. 112(C).
    14. Zhang, Fangzhu & Wu, Fulong, 2022. "Financialised urban development: Chinese and (South-)East Asian observations," Land Use Policy, Elsevier, vol. 112(C).

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