At the high level, the Chinese government bought all the bad debt and closed down some of the largest construction firms. It's a managed transition from the high rate of building they've been doing the past two decades to a more maintenance-focused construction industry as demand tops off.

I wish I knew more about how this effected people on the ground. I want to say that houses that have already been paid for are being built at a loss under state supervision, but I really have no idea.