The real estate equation ...

Country Garden’s Ten Mile Bay project in Nantong, China, on Saturday.

Credit...Qilai Shen for The New York Times

People are finally slowing down on buying stuff. You know, as per the great George Carlin so famously said, Buying stuff you don't need with money you don't have. As per GC, one has to buy a bigger house in order to house said stuff, right? Well, when you don't buy stuff, China takes the hit as their economy depends on people buying stuff, when the lust to buy stuff lessens, the impact on China's economy becomes rather large, especially when it comes to real estate as back in the good times, people migrated to the cities in order to work for companies to create ever more stuff and because of that, building apartments for the influx of people boomed but no longer, not only due to the reduced need for people to buy stuff but also due to the slow motion disaster of depopulation as China has one of the lowest reproduction rates in the world.

A model Chinese real estate developer in a sector replete with risk takers is teetering on the edge of default. Short of cash, one of China’s biggest asset managers has missed payments to investors. And billions of dollars have flowed out of the country’s stock markets.

In China, August has been a dizzying ride.

What started three years ago as a crackdown on risky business behavior by home builders, and then an ensuing housing slowdown, has spiraled rapidly this month. The broader economy has been threatened, and the confidence of consumers, businesses and investors undermined. So far, China’s typically hands-on policymakers have done little to ease anxieties and seem determined to reduce the country’s economic reliance on real estate.

“What is happening in the Chinese property market is really unprecedented,” said Charles Chang, who heads corporate credit ratings for Greater China at Standard & Poor’s.

For the last three decades, as China’s population surged and its people flocked to cities seeking economic opportunity, developers couldn’t build modern apartments fast enough, and the real estate sector became the engine of a transforming economy. Real estate employed millions and provided a store for household savings. Today, the sector accounts for more than a quarter of all economic activity.

Policymakers have tolerated the fallout of the real estate crackdown because even the companies that are not able to pay all their bills have continued to build and deliver apartments.

Putting a lid on it, for now ...

In February, thousands of retirees in Wuhan confronted officials to protest cuts in government-provided medical insurance for seniors. The cutbacks were a sign of the strain on local governments caused in part by the downturn in real estate that had hurt land sales, a reliable source of revenue.

Last year, hundreds of thousands of homeowners refused to pay mortgages on unfinished apartments. Some staged protest videos on social media, while collectives of homeowners tracked boycotts online.

Both protests drew notice, but the momentum petered out as the government intervened to limit discussion on social media, while adopting some steps to ease tensions. Last week, a new video outside Zhongrong’s offices showed no demonstrations but police cars and vans were parked in and near the facility.

The sales office at Country Garden’s Ten Mile Bay project. The company was once put forward as a model by the government.Credit...Qilai Shen for The New York Times