Pan Shiyi, a former Chinese real estate developer now living in New York, published a 5,000-word article titled "My Reflections" on his WeChat public account on April 16, directly calling China's housing market a "Ponzi scheme." The article has since been blocked across the entire Chinese internet. Independent commentator Cai Shenkun recently spoke out about the hidden machinery behind the CCP's manipulation of the housing market.
Pan Shiyi Calls China's Housing Market a Ponzi Scheme; Cai Shenkun: "The Statement of a Survivor"
In his article, Pan Shiyi focused on the highly leveraged, rapid-expansion development model of Chinese real estate companies, stating bluntly that the trajectory of China's real estate market amounts, in plain terms, to a "Ponzi scheme" — that is, no real profit was ever made; new money was simply used continuously to plug old holes. In his closing "reflection," he said that reviving China's real estate industry above all requires restoring outside confidence in the sector.
This publication of "My Reflections" marked Pan Shiyi's first public statement after years of silence. The timing coincided closely with the CCP authorities' arrangement of a public trial for another former Chinese real estate tycoon, Xu Jiayin (Hui Ka Yan), during which Xu confessed in court to the "eight major crimes" listed by the authorities.
Independent commentator Cai Shenkun, in an interview with New Tang Dynasty Television on April 17, said that "Old Pan" (Pan Shiyi) suddenly stepping forward to "reflect" at this moment could be understood as "the statement of a survivor"; his remarks also form a stark contrast with Xu Jiayin's case.
The 63-year-old Pan Shiyi has been active in China's real estate industry since the 1980s, and in 1995 co-founded SOHO China with his wife Zhang Xin. On September 7, 2022, SOHO China announced on the Hong Kong Stock Exchange that Pan Shiyi had resigned as chairman of the board, and Zhang Xin had also resigned as the company's CEO. According to overseas media reports, the couple moved most of their assets to New York — and successfully settled there — just as mainland China was tightening real estate policy and the market was weakening.
Cai Shenkun believes that Pan Shiyi, for deeper reasons, "ultimately pinned the blame on developers" in his article, directing his criticism at the developer class. This has led many to raise another question: as a real estate developer himself who has now left China, Pan can loudly criticize developers — but why has he made no move to hold the CCP authorities accountable?
CCP Real Estate Policy Created Today's Housing Crisis
Cai Shenkun went on to trace the development of China's real estate industry through the evolution of CCP real estate policy.
He said that China has no privatization of land — ordinary people, rich or poor, do not own land; all land belongs to the CCP regime. Because the CCP does not protect private property, for a long time no one truly treated land as private property, which is why land in China was extremely cheap.
In the early days of reform and opening up, as foreign capital entered China, much land was even given away for free. Local governments at every level, eager to attract investment, did not hesitate to hand over land — already fitted with the "three connections and one leveling" (water, electricity, roads, and graded land) — directly to investors.
After real estate began to be marketized in 1998, people started to see the potential profit in land resources. In this process, those who could obtain cheap or even free land were often families with power and connections.
The earliest such privileged families were the "princelings." Some of them may have played only the role of a "white glove" — a front helping developers acquire land. Princelings didn't even need to spend a cent or exert much effort; a simple meeting, a meal, a phone call, or a note was enough for local governments to actively cooperate and allocate land to the relevant people.
In this process, some members of the CCP's princeling class tasted the benefits, and subsequently threw themselves into the business as well. They did not go into it directly, however, but instead backed larger developers, holding shares in them or playing key roles behind the scenes. This is not an isolated problem involving just one or two companies. Whether it was Xu Jiayin or many other real estate firms, whoever had the strongest connections, the sturdiest backing — behind virtually every major developer there are direct or indirect shares held by the powerful and connected, with massive flows of interest transfer hidden behind the scenes.
In Cai Shenkun's view, it was precisely this model — woven together from the land system, power-seeking rent-extraction, and interest transfer — that ultimately sowed the seeds of today's real estate crisis in China.
He therefore believes that the roots of China's current real estate predicament, and the enormous debt it has left behind, lie primarily with the government itself, not simply with real estate developers.
Borrowing the Hong Kong Model, But Taking a Wrong Turn
Cai Shenkun further analyzed that China borrowed from the Hong Kong model in developing real estate, but took a wrong turn from the very start.
At the time, Hong Kong was a British colony, and its land system could never establish true permanent property rights, which is why Hong Kong developed a leasehold land policy — what amounted to several decades of tenure. China, by contrast, could have made land-use rights permanent from the outset, yet the CCP chose the Hong Kong model instead. Practices such as "flipping presale units" (buying a home before it is even built, then reselling it for a profit) and the mortgage system were also largely borrowed from Hong Kong's real estate model.
More importantly, when Hong Kong implemented its leasehold system, it also took into account the housing needs of ordinary residents. Cai Shenkun noted that during the colonial period, roughly 40% of Hong Kong residents were able to live in government-provided public housing.
But when the CCP launched real estate marketization, it did not adequately consider the needs of ordinary people. More than a billion people were pushed wholesale into the market, and the market ultimately spiraled out of control, with housing prices rising in only one direction. Land-based fiscal revenue kept pushing prices ever higher, forming collusion between developers and government, and ultimately driving China's real estate market into a predicament with no easy way out.
Real Estate Binds the Whole Nation; the CCP Captures 70% of the Profit
Over the past several decades, China's real estate market has surged ahead at full tilt. The revenue the government captured in this process arguably far exceeded that of the so-called developers. And in the end, all the resulting burdens and heavy debts were left to ordinary homebuyers — to every ordinary family.
Local governments, on one hand, used administrative power to suppress land acquisition costs, and on the other, monetized land through zoning adjustments; then, through grand promises and drip-feeding land supply, they extracted more loans from banks to fund rolling development. Through this repeating cycle, land values often rose dozens, even a hundred times over, giving local governments a huge taste of the benefits of land-based fiscal revenue.
Precisely because of this, the model kept being reinforced. Having tasted the benefits of land-based revenue, local governments went on to manufacture even more demand for housing through practices such as forced demolition and relocation. From the standpoint of a nation's long-term development, both high land prices and high housing prices are enormously harmful. They not only hinder sustained economic development, but also place an ever-heavier burden on families, steadily eroding people's sense of well-being. And any fluctuation or decline in the real estate market puts the government on edge. In the past, whenever housing prices fell, the government would roll out policies aimed at keeping the bubble inflated.
So today, China's real estate market has become tightly bound together with the Chinese economy, with local governments everywhere, with every bank, and indeed with every Chinese family.
Under these circumstances, after carrying out large-scale demolitions, developers have paid farmers extremely low compensation — often not even enough for them to buy another home. This process has generated a great many man-made mass incidents, resulting in waves of large-scale petitioning and protest across the country.
Cai Shenkun also cited earlier remarks by Ren Zhiqiang, former chairman of Huayuan Real Estate, who said that in the early days of real estate development, the government took the lion's share of housing sale revenue. Throughout the entire process — from planning, to land sales, to construction, to sales — the house itself may not have been worth all that much, but as prices rose, it was the government that took the largest cut, with roughly 70% ultimately ending up in government coffers. There are said to be nearly a hundred different taxes and fees involved in real estate.
Precisely because of this, local governments have a natural incentive to keep pushing housing prices higher. The higher home prices rise, the higher land prices go, and the more benefit local governments reap from the process. This shows that the one-directional surge in real estate prices over the past several decades has a great deal to do with the government itself.
Cai Shenkun said bluntly that Pan Shiyi's article only lightly touched on the problem of developers, without holding the government, the banks, or the whole system of land-based fiscal revenue to account — in other words, without reflecting at the level of policy.
Cai Shenkun: Pan Shiyi Still Has Tens of Billions in Assets in the CCP's Hands
Cai Shenkun said that Pan Shiyi's recent long article was not published because China's real estate or housing market has now stabilized — rather, it came only after the entire logic that "real estate will always be a pillar industry, housing prices will always rise, and scale expansion always succeeds" had thoroughly collapsed. And for China's real estate market today, this kind of reflection, in truth, carries little practical significance.
Cai Shenkun believes that although Pan Shiyi has by now transferred a considerable amount of assets abroad, and his and his family's personal safety is basically secure — and he has even begun preparing to re-enter real estate in the United States — Pan still has several tens of billions of yuan in assets that remain in the CCP's hands. So even his "reflection" amounts to little more than scratching an itch through a boot — it never truly touches, and dares not touch, the substantive issues. Because once he touches them, what ultimately happens to his nearly 20-billion-yuan worth of assets still inside China becomes very hard to predict.
Cai Shenkun said that, in fact, Beijing's tax authorities have already sent Pan Shiyi a penalty notice, claiming he owes back taxes and demanding he pay them.
Separately, many people have recently speculated about whether Pan Shiyi returned to China to sweep his family's graves during the Qingming Festival, and then quietly left again. Cai Shenkun speculates that Pan would not take such an enormous risk at this particular moment just to visit his father's or family's graves. It is more likely that he wanted to use the occasion of Qingming to voice a few reflections, testing the domestic public-opinion environment to see whether, under the current high-pressure political atmosphere, he still has any room left to speak.
"But what we've seen is that after 'My Reflections' was published — before it even got around to reflecting on the government — it was quickly scrubbed from the entire internet. And judging from the current situation, these remarks by Pan Shiyi have, to a great extent, completely sealed off any path for him to continue speaking out in the future," Cai Shenkun added.