Why is it difficult to get by in the country now? There is an issue of total demand and total supply here. For the past 20 years, real estate has been China's undisputed pillar industry—accounting for 7.34% of GDP, with related industries indirectly contributing 9.9%, totaling about 17% of GDP.

In 2021, the sales of commercial housing reached 18 trillion yuan, while in 2023, it dropped to 11.6 trillion yuan, a decrease of 36%. It is expected to continue declining by 20% in 2024, meaning that by 2024, it will have decreased by nearly 50% compared to the peak period. In other words, the overall GDP contribution of around 17% has dropped by 50%, which indicates that, under unchanged conditions from other perspectives, the GDP related to real estate and its associated sectors has decreased by about 7%-8%.

China's GDP growth rate has been around 5% each year, which means we are entering an "economic recession caused by the decline of real estate."

That's the situation, and I have never shied away from the truth. The problem is, everyone has experienced a real estate crisis—Europe has, the United States has, and of course, Japan has as well. Almost all "economists" immediately compare it to Japan, talking about the lost decades and so on.

I will refute this foolish argument once again; whether we lose decades depends on the industry. Japan's decline was due to its semiconductor and electronics industries being completely defeated by the United States. In contrast, China's semiconductor and automotive industries are still on the rise, and the traditional electronics and photovoltaic industries are currently in an invincible state. What decline are we talking about?

In a few years, you might suddenly find that China has also captured a significant share of the semiconductor market (currently in mature processes), and in a few more years, you might discover that China has made significant breakthroughs in nuclear energy…

Still, the point is, this is just a real estate recession.

What to do? Endure it and wait for the real estate recession to pass.

Some people say to look at the population, but you also need to consider the urbanization rate. China's urbanization rate is only 66%… When these two factors are combined, the population numbers are not that bad.

We still maintain the assumption that housing prices will hit bottom in 2027. Of course, it seems that perhaps next year there will be some monetary easing; it depends on the scale of the easing. If it is in the range of 3-5 trillion yuan, maybe next year will be the bottom.

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