Posted on 07/25/2022 2:14:14 AM PDT by RomanSoldier19
China's troubled property sector suffered another blow this month when frustrated homebuyers stopped making mortgage payments on units in unfinished projects.
The boycott came with many developers struggling to manage mountains of debt, and fears swirling that the crisis could spread to the rest of the Chinese -- and global -- economy.
Colossal. Property and related industries are estimated to contribute as much as a quarter of China's Gross Domestic Product (GDP).
The sector took off after market reforms in 1998. There was a breathtaking construction boom on the back of demand from a growing middle class that saw property as a key family asset and status symbol.
The bonanza was fuelled by easy access to loans, with banks willing to lend as much as possible to both developers and buyers.
(Excerpt) Read more at barrons.com ...
Because China may want to start calling in the loans it has made to the world.
I am not worried.
I think a chicom crash
would be wonderful.
Only issue I see....wave after wave of failed Chinese banks coming, and whatever ‘savings’ people had...just disappearing into a pit. So, with all your products made in China...why would they continue to work or produce...if there’s nothing left?
A cascading failure would be an issue, but I’m not a investment guy.
China has a massive MASSIVE real estate bubble. They’ve had it for years and have so far - thanks to the fact that its a one party dictatorship - been able to paper over the cracks. But that can’t last forever. The signs of it have been showing up in the form of the Evergrand collapse, several regional banks collapsing and now the contagion spreading to even more real estate developers.
The big 4 Chinese banks are holding a mountain of toxic assets they have thus far refused to recognize and still have recorded at book value. When - not if - they are finally forced to recognize those assets at their actual value, the size of the Chinese economy and will dramatically shrink. A lot of the wealth China accumulated will go “Poof!” and disappear in a cloud of ghost cities, half built (and very shoddily built) apartment blocks, boondoggle public works projects, etc.
It won’t be so easy to fix either. Thanks to the one child policy, their average population age is rapidly catching up to that of the US, Europe and Japan which aged slowly over the course of a century and after they’d built up a lot of wealthy China has not had the time to build up yet.
I think a chicom crash
—
Unfortunately all property in China is owned by the CCP and they would never allow a crash unless it benefited them.
Hence, they will need a REALLY LARGE distraction.
They build these cities ahead of time with the expectation they will be occupied eventually. Very strange.
Paper over the cracks..../lm@soff
A lot of buildings in China are called Trowel Buildings
Because of cracks in the walls, floors and stairways
Wood (or fake wood) trim around doors and windows missing
An on occasion the steel reinforcing showing in the floor.
Not to mention an entire building collapse
I am FAR more concerned about the properties that China is buying in the USA.
I am FAR more concerned about the properties that China is buying in the USA.
—
Yes but that is not the subject of the thread.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.