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On August 14, the 2024 Boao Real Estate Forum was held in Hainan. Fan Gang, vice president of the China Economic System Reform Research Association and president of the Shenzhen Institute of Comprehensive Development, a national high-end think tank, delivered a speech on the theme of "Policies and Countermeasures in Economic Fluctuations".

He believes that from a macroeconomic perspective, China's economy is still in recession, with a growth of 5.3% in the first quarter and only 4.7% in the second quarter. Various problems are still being exposed, downward pressure is still huge, and there are still many uncertainties.

Now that the real estate market is in recession, how to judge and plan the next stage of development is indeed very important for the economy and enterprises.

So, where is the bottom? Fan Gang believes that we have reached or are close to the bottom. After the bottom, there is a stage of crawling at the bottom, which is the so-called "L" shape, and there will be a difficult period.

"A crisis or a fluctuation will not pass in one or two months, or one or two years. The problems accumulated over 40 years will take some time to repair. In this process, many companies will be eliminated and undergo internal restructuring. This is happening in all countries around the world," he said frankly.

At the meeting, Fan Gang also put forward his own views on urbanization development. He believes that the development potential of the real estate market in the next stage is urbanization.

He said that we have been emphasizing the acceleration of urbanization in recent years, but the urbanization policy is not called urbanization, but urbanization. "Small cities and towns have unlimited land supply, while large cities have restrictions. As a result, people leave after houses are built in small cities, while large cities do not provide land or quotas and restrict development. As a result, the population increases, prices soar, and polarization is formed. This is the detour we have taken in the past."

There has been a recent change. The document mentioned that the process of urbanization should be accelerated, including that cities should absorb farmers and permanent residents into cities, and cities should provide more public services for new permanent residents. This is called urbanization. If this speed is accelerated, there will be some benign adjustments in the structure of China's economy, including consumption and demand for housing.

From 60% urbanization to 80% urbanization, we can see that China's economic potential is still there, but it must face the various problems caused by urbanization.

Fan Gang said that in the face of new problems that may be brought about by accelerating urbanization, an important method is to develop urban agglomerations. In the face of urban diseases in large cities, through the development of urban agglomerations, large, medium and small urban areas in a region are connected by convenient transportation to achieve complementarity between large, medium and small cities, so that this region can absorb more people and allow more people to enter an urbanized lifestyle, driving further consumption and further development.