State enabled would be a better way of looking at it. The state (well more correctly the provinces) have been incentivised to perpetuate this real estate bubble

State enabled would be a better way of looking at it. The state (well more correctly the provinces) have been incentivised to perpetuate this real estate bubble because they derive a ton of their funding through the sale of land. Actually -funding- the developers is an entirely different matter however. They are partially funded through pre-purchases of off-the-plan apartments, this is then leveraged mostly through bonds, primarily sold to said private banking sector but largely to off-shore buyers seeking high yield corporate paper. The SOEs and large Chinese banks like ICBC, BOC, HSBC and insurance/finance provides like Ping An have largely kept their distance for the last decade - in part because of that risk adversity and very large safety capital requirements that prevent them from owning such high risk debt. China -did- learn their lessons from 2008, unfortunately they have fallen victim to other ways of generating extreme financial leverage. Right now the de-leveraging is still happening, the Three Red Lines stipulations have been relaxed somewhat in the last few months to try ease up pressure on the real-estate market during global downturn but are still limiting debt expansion in the sector. I would say they have successfully staved off a crash/collapse but I would expect the real-estate market in China to enter a long period of stagnation at this point.