Commentary No economy has been able to ignore a property bubble and, even less so, offset it and continue to grow, replacing the bust of the real estate sector with other parts of the economy. Heavily regulated economies from Iceland to Spain have failed to contain the negative impact of a real estate sector collapse. It will not be different in China. China has three real estate problems: the massive size of the sector, its excessive leverage, and the amount of developer debt in the hands of average households and retail investors. According to China researcher George Magnus, writing in The Guardian, “China’s real estate market has been called the most important sector in the world economy. Valued at about $55tn, it is now twice the size of its U.S. equivalent, and four times larger than China’s GDP.” Considering construction and other real estate services, the sector accounts for more …