The Real Estate Restructuring Dilemma: Taking Chinese Market as an Example

Abstract

Against the backdrop of global economic integration, China’s real estate market, under the dual challenges of economic transformation and policy adjustments, has seen the dilemma of restructuring become increasingly prominent, exposing deep-rooted structural problems. This study delves into the restructuring dilemmas faced by China’s property market in the context of economic transformation and stringent policy adjustments. Based on a combination of structural equation modelling (SEM) and case study methodologies, this study examines the multifaceted financial, legal and market-based obstacles that real estate firms encounter in the restructuring process. The case studies explore in detail the realities of specific firms. Meanwhile, applying structural equation modelling helps to quantitatively assess these factors’ direct and indirect impact on restructuring outcomes. According to comprehensive analyses of the financial data, policy context and market dynamics of the firms involved, the study reveals core issues such as heavy debt burdens, asset depreciation and mismatched market demand. These factors amplify liquidity risk amidst stringent financial regulation and market deleveraging efforts. These findings suggest that the current restructuring framework needs more flexibility, and market-oriented delisting policies may accelerate the restructuring process. This study provides valuable insights for understanding the systemic risks associated with real estate restructuring. It offers policymakers and industry practitioners strategic guidance to address these complex challenges.