Skip to main content

The Builders of the Real Estate Bubble

From the series Big groups in China

An important element in analysing the changes in single-party pluralism in China is the investigation of the struggle between different groups and fractions of the bourgeoisie. The study of key economic sectors can reveal shifts in internal balances and, at the same time, allow us to follow the rise of Chinese imperialism through concrete examples of companies that are projecting themselves onto the world market. One of these key sectors is construction and real estate. This is a vast field, ranging from cement production to energy, transport infrastructure, and housing.

Scrolling through the ranking of the 500 largest Chinese companies, we find 29 construction companies, with $2.4 trillion in assets and 2.8 million employees in total: ten years ago, there were 40 groups. The sector lost 4% of its capital and 5% of its employees in the overall ranking as a result of a twofold dynamic: groups linked to residential construction are declining, mostly giving way to those of Yellow China, while builders of large infrastructure and energy projects are on the rise. Cement and electricity, symbols of the old and the new in China’s industrial restructuring, are now recombining within and along the Silk Road. This dialectic, common to other sectors, also sums up the particular history of Chinese restructuring, which emerged from the infrastructure stimulus of 2008 and was accompanied by the controlled deflation of the real estate bubble. In essence, there is a dynamic produced by several movements in the ranking of large groups.

The real estate crisis

After tripling in size over the course of a decade, the Chinese construction market is now the largest in the world, accounting for one-fifth of all construction investment. The sector is one of the pillars of the national economy, writes the People's Daily. This huge domestic market remains the launch pad for large economic groups to enter the global market, despite the difficulties of recent years. Even before the Chinese real estate crisis, which broke out in 2021, changed the top of the rankings, indicating the first winners and losers, a process of concentration and selection of large and medium-sized groups was underway, due to the end of the housing boom linked to urbanisation. The causes of the real estate crisis can be found in the slowing influx of rural migrants to cities and the decline in new urban construction for the first time.

Chinese statistics show declining employment in construction companies for the first time in 2018, from 55 million to 53 million, reaching 51 million today. Construction machinery is also an indicator of the cycle in the construction industry: installed capacity jumped from 92 gigawatts (GW) in 2000 to almost 300 in 2014, before falling sharply to 230 in 2021 and 170 in 2022.

One of the few data sets (collected since 1985) is the square metres under construction and completed. Until the early 2000s, about half of the space under construction was completed each year. The trend reversed in 2015, with a decline in finished space in absolute terms and, relative to work started, from one-third to one-quarter in 2022. These few data points place the end of the boom around 2015. This phenomenon is more pronounced in the provinces of Blue China than in those of Yellow China. The result is a relative loss of importance for groups linked to residential construction in the coastal area and the entry of Sichuan builders into the top ten groups in the ranking.

Major bankruptcies

Evergrande, the largest Chinese and global real estate company in the pre-Covid years, based in Guangzhou and founded by billionaire Hui Ka Yan (Xu Jiayin in Mandarin Chinese) in 1996, has risen to international prominence. Mainly focused on the housing sector for people with medium-high incomes in the southern provinces of China, Guangdong in particular, its minority shareholders included other billionaires such as Hoi-wan Chan of Hong Kong, Jack Ma of Alibaba, and Li Yonghong, already a partner in real estate investments with Donald Trump. The value of Evergrande’s shares had grown by 470% in 2017, but began to decline the following year, with the slowdown of the entire sector, until it collapsed financially in 2021, making the Chinese real estate crisis official. Hui Ka Yan ended up, ingloriously, in a special Shenzhen detention centre, fined $6.6 million and banned for life from the financial market after it was discovered that Evergrande had inflated earnings and committed securities fraud [Reuters, September 13th 2024].

Another Chinese real estate giant, Country Garden, is fighting to avoid the fate of Evergrande. Founded in 1992 in Guangdong province by Yang Guoqiang, who later transferred his shares to his daughter Yang Huiyan, it is a real estate development company operating in over 1,400 cities, with more than five million customers. In October 2023, Country Garden announced that it was unable to honour its debts contracted outside China.

The other big players in Guangdong

China Poly Group weathered the crisis better: founded in 1992, it originated ten years earlier as Poly Technologies, for the import and export of special and military equipment and technologies and is controlled by the China International Trust and Investment Corporation (CITIC), established by Deng Xiaoping in 1979. Today, it has hundreds of subsidiaries and affiliates. The group’s real estate division is based in Guangzhou, and in 2023 it had a turnover of over $47 billion and more than 56,000 employees.

The story of the Vanke group is unique in that, unlike many state-controlled companies in difficulty that were subsequently privatised, it took the opposite path. Founded in 1984 in Shenzhen, Vanke began its real estate activity at the end of 1988, starting its rise with annual increases of 30-35% until 2015. That year, founder Wang Shi faced a hostile takeover bid that convinced him to bring in Shenzhen Metro Group, a state-controlled railway company, as a shareholder, which acquired a controlling stake in 2017. The group was initially spared from the crisis, but suffered significant losses in 2024.

It remains to be seen whether Chinese real estate companies will be able to get off the roller coaster. The trend of the last decade has been a decline in the importance of the residential sector in the face of the growing role of energy and infrastructure groups which are the main builders of the Silk Road.

THE MAJOR BUILDERS

THE MAJOR BUILDERS revenue employees
China State Construction Engineering 320,431 382,894
China Railway Engineering Group 178,563 314,149
China Railway Construction 160,847 336,433
China Communications Construction 136,671 219,034
PowerChina 97,035 184,567
Pacific Construction Group 76,433 293,125
China Poly Group 73,999 102,834
China Vanke 65,790 131,097
China Energy Engineering Group 57,708 119,182
Greenland Holding Group 50,897 59,970
Susun Construction Group 45,265 141,256
Shanghai Construction Group 43,031 51,272
Guangzhou Municipal Construction Group 42,403 50,608
Shudao Investment Group 35,379 55,878
Shaanxi Construction Engineering Holding 34,061 41,390

Revenue in millions of dollars.

Source: Fortune China 500 [2024 edition].

The outlet of the external projection

China State Construction Engineering is the global leader. The state-owned group, founded in 1957, claims to have built more than 90% of skyscrapers above 300 metres, three-quarters of key airports, three-quarters of satellite launch bases, one-third of urban utility tunnels, half of nuclear power plants. One out of every 25 Chinese people lives in a house built by China State Construction [Construction Digital, January 17th, 2024]. The group controls more than 100 companies and operates in over 100 countries around the world. In 2020, Washington added it to the list of companies linked to the Chinese military and it is therefore currently excluded from US shareholding.

The two other large state-controlled engineering and construction companies are China Railway Construction Company (CRCC), which was featured in the October 2021 issue of Lotta Comunista, [“Dal genio militare alla Via della Seta”], and China Railway Engineering Group. These two companies have designed and built most of China’s rail transport infrastructure and are active in Southeast Asia, Africa, Russia, and Venezuela. We also wrote about China Communications Construction Company (CCCC) in March 2019. PowerChina has held over 50% of the Chinese hydroelectric power plant construction market for the past 60 years. Known for its participation in the construction of the world’s largest hydroelectric power station, the Three Gorges Dam, PowerChina boasts other firsts, such as the Jinsha Dam, the second largest in the world, and the Nile Dam in Sudan, the longest in the world.

“Red dragon fish”

The largest privately owned construction company, Pacific Construction, is also Chinese. It is controlled by Yan Jiehe, born in Jiangsu province in 1960. He studied Chinese literature at Renmin University in Beijing and began working as a teacher. In 1986, he was publicly selected as manager of the Huai’an Yinjiang Construction Engineering cement factory, becoming its president in 1995 and transforming it into the current Pacific Construction. In conjunction with China’s One Belt, One Road initiative, Pacific Construction moved its headquarters to Xinjiang and began expanding overseas to Malaysia, Albania, Montenegro, South Africa, Botswana, and Zimbabwe.

The founder is considered a thinker, as well as an economist and businessman, and has been a guest at Davos, Harvard, Cambridge, Oxford, and so on. In an interview with the Financial Times, Yan Jiehe preferred to paint a different picture: In the sea of the market economy, I am a fortunate and formidable red dragon fish [February 1st, 2015]. That is to say, a businessman in the capitalist world, an aggressive hunter of other freshwater fish – the red dragon fish.

Translated from the original work by , published in Lotta Comunista, , p. ?.

Labels:

Popular posts in the last week

Libertarian Communism: A Different Kind of Communism

Chapter Three LIBERTARIAN COMMUNISM: A DIFFERENT KIND OF COMMUNISM   An examination of the debate within the groups that were to create GAAP (Anarchist Groups of Proletarian Action) gives a vivid picture of the problems that between 1948 and 1951 had to be slowly and painfully faced. Three major confrontations, progressively more serious, took place between Cervetto and Masini in the autumn of 1949 and again in the spring and autumn of 1950. As preparations were being made for the National Conference at Pontedecimo – from which GAAP would be born – debate on the nature of the organisation and on theories of the State and imperialism began to define the characteristics of the new political group, but also revealed the differences. The first step had been to look for ‘a different kind’ of communism in anarchism. Along this road Cervetto , with an ever-surer grasp, would raise the issue that had been first posed by Marx and Lenin : our militant...
Read more

Opportunities for the Euro and Yuan

Internationalism No. 77, July 2025 Page 13 Estimates by international institutions for April to June confirm the slowdown in global output and trade. The World Bank forecasts a decline in GDP growth from 2.8% in 2024, to 2.3% in 2025, and a sharp fall in trade from 3.4% to 1.8%. The main cause of the new slowdown is the tariff war declared by Donald Trump, who has so far imposed a universal minimum tariff of 10%. The uncertainty arising from his peculiar art of the deal , consisting of lunges, postponements, relaunches, U-turns, and pauses, makes the policy of the world's leading power unpredictable. It is also paying the highest price, with US growth halving, from 2.8% to 1.4%. The Eurozone has been floating at a rate of less than 1% since 2023 and, according to the World Bank, will remain below this level in 2025 and 2026, while the OECD and the ECB predict a return to 1% in 2025. Chin...
Read more

Lotta Comunista: The Origins 1943-1952

Guido La Barbera Contents 9. Preface to the English Edition 13. Preface 19. Useful dates 21. Chapter One «ONE OUGHT TO KNOW WITH WHOM ONE IS DEALING» 25. The balance-of-power theory 27. Theory and the ‘strategy-party’ 29. Chapter Two THE FOUNDRY AND THE PARTISAN STRUGGLE 31. The Savona group 39. Passion disciplined by reason 40. Never again a tool in the hands of others 41. The Genoa group 46. The Sestri Ponente group 48. The groups in Rome and Tuscany 52. The strength of GAAP: ‘only a handful’ 55. Chapter Three LIBERTARIAN COMMUNISM: A DIFFERENT KIND OF COMMUNISM 58. Reckoning with Bordiga...
Read more

An Italianised Europe

Internationalism No. 88 - June 2026 Page 2 In almost four years in government, Italy’s renewed stability has been a key asset for Giorgia Meloni, also encouraging the European adaptation of the italian-style immigrants . However, the backlash from the referendum defeat, a real own goal, has opened a glaring rift that runs through both the end of the current legislature and the prospects for the next. There is debate over the political exhaustion of her government, forced to navigate the narrow path of budgetary statistics and under the threat of what the Financial Times has termed a “coming energy crisis” triggered by the blockade of the strait of Hormuz. At the referendum polls, the left-wing broad coalition “discovered” that it could compete with the centre-right, but no poll shows any substantial changes in the balance of power. The scenario of a “deadlock”, or a narrow majority for one...
Read more

The EU Commission Plans for Rearmament and a Clean Industrial Deal

Internationalism No. 71, January 2025 Page 2 From the series European news Following the European elections which took place on June 6th - 9th, the leaders of the Member States met on June 27th at the European Council. Ursula von der Leyen was nominated as president of the next European Commission, after she was chosen as the European People’s Party’s (EPP) Spitzenkandidat (“leading candidate”). The agreement also included the election of former Portuguese Prime Minister Antonio Costa as president of the European Council, and the appointment of former Estonian Prime Minister Kaja Kallas as High Representative of the Union for Foreign Affairs and Security Policy. Subsequently, on July 18th, Parliament elected von der Leyen as president of the Commission by an absolute majority, with 401 votes out of 719 MEPs. On September 17th, von der Leyen presented her team of commissioners to the European Parliament and, two days later, the Council adopted this list of...
Read more

The Unitary Imperialism Issue

Chapter Six   In 1951 Europe, and the world, was shrouded in mist. The ‘Cold War’ ideology ruled, and the war in Korea made a world conflict between the USA and the USSR seem a real possibility. In France, Great Britain, Germany and Italy, the talk was of rearmament. Europe, at that time urged by the USA, was planning the EDC (European Defence Community) to keep step with German rearmament. The concept of a ‘ unitary imperialism ’ was the strategic choice that helped the small GAAP group remain politically independent. But translating this into an ‘Internationalist Third Front’ slogan was unfortunate. It facilitated a link with French libertarian communists, but could also cause confusion with its suggestion of a ‘Third Force’ between the USA and the USSR, which in Europe was supported by important bourgeois currents. Although opposition to unitary imperialism consolidated the internationalist struggle, the theory required to be developed and per...
Read more

Capitalist Chaos and Artificial Intelligence

Internationalism No. 88, June 2026 Page 1 From the series Artificial Intelligence It may seem curious that the Franciscan friar Paolo Benanti refers to neuroscience and the theories of David Eagleman, which reflect a materialistic conception of consciousness. The explanation probably lies in Eagleman’s self-definition as a possibilian , a not particularly clever neologism that seeks to distinguish itself from atheism, but also from agnosticism: we know too little, so science must keep multiple possibilities open at once. In Engels’ view, agnosticism is shamefaced materialism . The scientist, as such, is a materialist. However, outside his own field, he translates his ignorance into Greek and calls it agnosticism . Eagleman is even more circumspect, so it is understandable that religion sees an opening for itself in the possibilities left open. In Die Zeit , Benan...
Read more

Europe’s Armed Non-Belligerence in the Gulf

Internationalism No. 86, April 2026 Page 6 On February 28 th , the attack launched by the United States and Israel against Iran ignited the third Gulf War . Already dealing with the conflict in Ukraine on its eastern flank, Europe now finds itself facing a second war on its borders, this time to the south. Unlike in 1991 and 2003, in the current conflict Washington has made no effort to build a coalition. No European or NATO country, nor any regional power, has been formally involved in the plans for intervention. European exclusion and the Atlantic crisis Europe’s initial exclusion – despite now being called upon to bear the energy, economic, and political consequences of Washington’s new war of choice – is the latest chapter of the Atlantic crisis . The issue has been at the centre of the European press’s commentary. Particularly in the early days, Brussels’ delays and impotence...
Read more

The Four Petrochemical Giants

Internationalism No. 86, April 2026 Page 15 From the series Major industrial groups in China When the People's Republic of China was founded in 1949, oil extraction in the country was practically non-existent, and the country was completely dependent on imports. The exploration and development of domestic oil resources required a major effort. As Jin Zhang reports in his book Catch-up and Competitiveness in China [Routledge, 2004]: The required massive human resources were supplied by the People's Liberation Army (PLA). In 1952, Mao Zedong ordered the reorganisation of the 57 th Division of the 19 th Army of the PLA into the 1 st Division of Oil . The effort led to the discovery of several oil fields, the most significant of which was in Daqing, Heilongjiang Province, in northeastern China, in 1959. It became operational the following year, reaching a ...
Read more

Electoral Upheaval and Turmoil Inside Labour

Internationalism No. 88, June 2026 Page 3 From the series European news As Henry Kissinger wrote in his book Leadership (Penguin, 2022), in the British political system, parties are "rigorously institutionalized": "An electoral victory functions first to empower a party in parliament and, as a consequence of that, to install a new premier". Unlike presidential systems such as the American one, "the British system elevates members of the cabinet to the highest echelons of their party". The prime minister's authority "rests primarily on the maintenance of party discipline" because "the dissent of an influential clique, or the machinations of a single magnetic personality, can limit the premier's ability to pursue desired political objectives". "In extraordinary circumstances", warns Kissinger, ...
Read more