A curious thing has been happening in China’s vast real estate market — or rather, not happening.

For two years, a financial crisis has rocked developers China Evergrande Group, Country Garden Holdings and China Vanke along with their roughly $US700 billion ($1.1 trillion) in assets. Building activity, however, has until recently been holding up remarkably well.

China’s real estate crash has showed up everywhere except the real estate data.Credit: Getty

That’s surprising. In the US, home completions — the amount of residential property getting finished off for sale to buyers — fell by about half in the two years after the housing market peaked in 2006. They continued to collapse to roughly a quarter of their maximum level by 2011.

Things have been very different in China. Two years after the market started to crack in 2021, completions last year were down less than 1 per cent from their peak. The real estate crash showed up everywhere except the real estate data.

The implications of this don’t just matter for buyers of property-developer bonds. China’s construction sector accounts for nearly 7 per cent of the world’s carbon emissions. Its hunger for metal is so voracious that plans for mining the materials needed for the energy transition stand or fall on whether the current real estate crash will allow millions of tonnes of copper, aluminium and nickel to be diverted from apartment fittings toward solar panels, electric cars and wind farms.

China’s housing data is so contradictory that it confounds even experts, who typically end up choosing which inadequate indicator to rely on and which others to discard. If you’re thinking about commodities and emissions, however, it’s worth considering that a developer can go broke without its labourers downing tools. Construction work may even accelerate if a company or its administrators seek to finish off work so that sales can be completed and cash released.

Production of steel, copper, aluminium and glass, buoyed by manufacturing demand, has increased, even as the real estate market crashed.

To understand what’s been happening, it’s worth considering the way housing gets built.

When excavators first break ground on a building site, it’s recorded by China’s National Bureau of Statistics as a housing start. Next cement is poured and steel reinforcement bars and beams are used to build the foundations and structure of an apartment block, a process that takes the better part of a year.