Now many of the largest developers are going bankrupt and have left many of these building fully pre-sold unfinished, yet the buyers are required by the bank to continue to make mortgage payments (which they took when they pre-bought the apartment). They are revolting and are refusing to pay as a group and this is threatening the stability of the Chinese banks.
Good post - thanks.
The Chinese are revolting?
I thought they were just rude.
I have not kept up with all the changes and free market reforms in China in recent years.
I didn’t realize there was so much private ownership of housing allowed in China. Under communism theoretically there is no private ownership
This is an easy problem for the ChiComms to solve. Just shoot a couple of defaulters. The rest will pay up ASAP.
[shrug] That’s risk of committing to pay for something before it exists. Akin to our “cancel student loans!” protests.
_Goodfellas_ comes to mind: “F U - pay me!” segment https://www.youtube.com/watch?v=3XGAmPRxV48
Not to worry, the Biden Regime will send money to China.
Wanna bet?
After all, China has sent turdloads of money to the Bidens - and payback will be demanded.
That family makes Joe Kennedy’s brood of felons look like CNN amateurs.
>They are revolting and are refusing to pay as a group and this is threatening the stability of the Chinese banks.
A great summary. Yeah, it’s a lot like Soviet Russia where apartments were the only investment Russians could make. If you had a nice place in Moscow, when you got old you could trade your place for somewhere in Sochi and make ‘money’ on the side. The Chinese are doing the same, but now no one wants the apartments.
State-run capital markets are going to crush us and the next generation will blame capitalism and not state controlled banks and capital.
The ones that do somehow get built are “tofu-dreg” quality. Falling apart even before they are finished.
...the risk of defaults from offshore developer bonds to banks with $6 trillion of mortgages.
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$6 trillion. That’s kind of a serious about of money. The U.S. economy is about $23 trillion, so this debt represents about 1/4 of the entire U.S. economic output for a year.
“So basically in China most people buy apartments in large condominium towers.”
The “buyers” own nothing.
They sign a 99 year lease for the apartment.
When they die, the apartment becomes the property of the CCP, the Party then leases the property to someone else. You can not give your apartment to your heirs because You Don’t Own It.
But not to worry. Due to the fantastic, old world craftsmanship of the Chinese workers the place will fall in around your ears before you hit 60.
See my tagline.
Sooner or later the real estate bubble is going to burst. You can only hide that many bad debts for so long. To be honest, I’m surprised they’ve managed to keep it contained for this long.
Oh by the way, a lot of the GDP numbers you see reported for China are crap. Real estate development is a significant part of their economy. A lot of this real estate reported at book value is not worth anything remotely like that....half finished, shoddy construction, entire ghost cities, etc etc.
The leak of over 1 billion people's data from the Shanghai police database has shocked the global cyber security community.
Executives from Alibaba Group Holding Ltd. cloud division have been called in for talks by Shanghai authorities in connection with the theft of a vast police database, according to people familiar with the matter, adding urgency to an internal investigation by the Chinese tech giant into how one of history's largest data heists was allowed to happen.
The investigation revolves around a cache of sensitive Shanghai police data on an estimated nearly one billion Chinese citizens, which was offered for sale online for the equivalent of roughly $200,000 in late June. Cybersecurity researchers said a dashboard for managing the database had been left open on the public internet without a password for more than a year, making it easy to pilfer and erase its contents.
The breach has highlighted the volumes of data Chinese authorities are collecting through the country’s nationwide digital surveillance system, as well as the difficulty the government faces in keeping that data secure.
https://www.wsj.com/articles/alibaba-executives-called-in-by-china-authorities-as-it-investigates-historic-data-heist-11657812800
Police data on 1 billion Chinese will expose China's reality and deep secrets; so, who did it?
https://www.youtube.com/watch?v=qZo_QnltvDg