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Mar 6, 2026 
Mike Bird, The Economist’s Wall Street editor and author of The Land Trap, draws on years in Asia and research into land and real estate. He traces how Hong Kong leasehold practices spread to China, explains why local governments rely on land sales, and explores the political and economic forces behind China’s massive property boom and its wider consequences.
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How A Single Conversation Changed Policy
- Mike Bird recounts Zhao Ziyang’s conversation with Hong Kong developer Henry Fock where Fock asked, 'If you have land, why don't you have money?'
- That exchange inspired leasing experiments like Shenzhen's 1987 auction that scaled nationwide.
Land Leasing Fueled China Urbanization
- China financed urbanization by leasing land to developers instead of selling freehold, converting land into a cash-flow source for governments.
- Shenzhen held the first symbolic land auction in 1987 and the model scaled as local governments used leases to raise huge off‑budget revenues.
Savings, Repression, And The Housing Glut
- Chinese households poured savings into housing because financial repression limited attractive alternatives and banks offered low real returns.
- The result: extreme household saving and many vacant units, producing both apparent shortage and glut simultaneously.
