I’ve been following the Housing Crash in China for months. It’s a classic Ponzi Scheme on steroids. Big offshore funding is locked up in this mess and may never be recovered as the CCP is focusing on helping homebuyers - who’ve protested in 400 cities without any cares that armed thugs are going to arrest them. The government must stop the video evidence of these protests surfacing everywhere on government social media accounts - citizens brazenly daring their government to lock them up for protesting.
Note that many banks and developers are “insolvent” due to the three redline policy instituted by the CCP. For a quick synopsis of how big a threat the real estate implosion is, read this post I placed on this board a few hours ago:
https://discussion.fool.com/ten-stocks-affected-by-china39s-re-m…
That said, here come the bailouts:
Financial Times headline: China’s central bank seeks to mobilise $148bn bailout for developers
Sub-headline: Heavily indebted sector to receive new loans to complete unfinished apartments owed to angry homebuyers
Beijing is seeking to mobilise up to Rmb1tn ($148bn) of loans for stalled property developments, in its most ambitious attempt to revive the debt-stricken sector and mollify home buyers who are boycotting mortgage repayments after lengthy construction delays.
China’s property sector accounts for about one-third of total output in the world’s second-largest economy. The industry’s prolonged downturn was a significant reason, alongside rolling Covid-19 lockdowns across the country, that growth slowed to just 0.4 per cent year on year in the second quarter.
The People’s Bank of China will initially issue about Rmb200bn of low-interest loans, charging about 1.75 per cent a year, to state commercial banks, according to people involved in the discussions