The financialization and de-financialization of rental housing in China: how the state’s governance capacity affects financialization

China’s rental housing sector has emerged and experienced significant transformation in recent years, primarily driven by the state’s varied financialization governance strategies. As shown in the paper, the governance of rental housing financialization has exhibited a fluctuating trajectory, unfolding in four distinct stages: non-financialization (2010–2015), financialization (2015–2019), de-financialization (2019–2021), and segmented re-financialization (post–2021), thereby forming a ‘pendulum swing’ pattern. Furthermore, the paper suggests that the state’s governance capacities—including compliance, extraction, and coordination capabilities—serve as mediating factors in determining the specific modes of (de-)financialization. In response to the literature on Chinese-style state entrepreneurialism, we argue that the state’s changing governance mode concerning the (de-)financialization of rental housing sector functions as statecraft strategies, which are deployed to achieve two key goals: fostering economic growth and ensuring socio-political stability; however, the prioritisation of the two goals dynamically shifts over time. This reflects the principles of ‘adaptive governance’ and underlines the inherent flexibility of state entrepreneurialism. This study provides new insights into the diversity and dynamic nature of the state’s financialization strategies, uncovering the complex underlying mechanisms that shape the governance of rental housing in China.