Four years after property developer China Evergrande defaulted on its sky-high debts and marked the beginning of China’s property crisis, the sector remains a cancer within its economy.

Data released by China’s National Bureau of Statistics on Monday shows its economy continues to weaken, with retail sales at their lowest since the pandemic and the country facing its first fall in investment since the late 1980s.

At the heart of its economic challenges – which saw a 2.6 per cent year-on-year decline in fixed-asset investment in the first 11 months of the year – is the seemingly endless implosion within China’s property market.

China Evergrande’s collapse has started a property cancer in the nation’s economy, which continues to metastasise.Credit: Getty Images

Prices and sales volumes are continuing to fall – sales have nearly halved since the property crisis gathered momentum in 2021 – and investment in property has plunged 15.9 per cent in the 11 months to the end of November.

From the moment China Evergrande, at one point the world’s most indebted property company with a debt load of more than $US300 billion (more than $400 billion at the time), began teetering in 2021, the collapse of the property market has increasingly infected key aspects of China’s domestic economy.

It has savaged household wealth which – given roughly 70 per cent of Chinese household wealth is tied up in property – has in turn damaged consumer confidence and spending.

Beijing’s traditional response to downturns – boosting investment in property and infrastructure – isn’t appropriate in the current circumstances.

It has undermined the finances of local governments, which........

© The Sydney Morning Herald