I have always believed that Lang Xianping’s words only have media significance, and he should not be regarded as a real economist at all.
Lang’s view that “real estate problems are caused by problems in the manufacturing industry” is based on his reasoning: due to the decline in manufacturing profitability, social funds are tilted towards the financial sector, while the stock market is due to various reasons (such as The failure of the shareholding reform policy he mentioned) lacked the attraction for funds, so the funds eventually flowed to real estate, so housing prices remained high. This reasoning process seems reasonable, but it is actually too simple. The counter-evidence is as follows:
1. After the 2008 economic crisis, the United States also faced a reduction in manufacturing investment and a weak economic recovery, so it had the so-called QE2 policy. But throughout the process, the U.S. stock market rose and fell, while U.S. real estate prices did not fall or rise simultaneously. In the United States, there is no such thing as the stock market and the housing market going in opposite directions. Of course there are many explanations here, and I don’t want to go into them here, but it can at least prove that Lang’s reasoning needs more supplements.
2. It is true that some manufacturing companies invest funds in real estate, but it would be arbitrary to say that there are problems in the manufacturing industry. China's regular trade surplus should be contributed by the manufacturing industry. If there are really problems in the manufacturing industry, there is no need for the United States to put pressure on the Chinese government to appreciate the RMB. It can just wait for the problems in China's manufacturing industry to break out.
3. The real estate industry has indeed gathered a large amount of RMB liquidity, but there is no data to confirm how much of it comes from the manufacturing industry.
4. However, Japan did have too much liquidity concentrated in real estate, which caused a huge real estate bubble in Japan. Even today, Japanese housing prices are still very high. But that liquidity may not necessarily be transferred from the manufacturing industry, because in Japan at that time, the stock market bubble and the property market bubble appeared together.
5. You can find many research papers on the websites of the Federal Reserve and the Bank of Japan. I have not found any articles discussing the correlation between real estate issues and manufacturing issues. It is also difficult to find research on the correlation between the two in the field of international macroeconomic research.
6. Lang may be right to say that China’s manufacturing industry has problems, and he may also be right to say that real estate has problems, but to say that there is a causal relationship between the two, or to use strict statistics to say " There is a lack of empirical evidence.
The above opinions are for reference only.