Xi has a real mess on his hands now, and there’s just no way China records 5.5% GDP by end of this year:
More from a Mint transcription accompanying a Bloomberg:
The payments protest is the latest sign of how a movement by homebuyers to boycott mortgages on unfinished homes in China is spreading to affect other sectors in the economy.
The development underscores a dilemma for Xi Jinping’s government as it grapples with who to bail out as the country’s property crisis deepens: Relief for some borrowers could prompt threats of non-payment by a whole host of others. While bending to demands for support could put a strain on state finances, ignoring them might lead to a spiral of defaults as more and more borrowers refuse to meet their obligations.
The mortgage strike, which kicked off in late June in a stalled Evergrande development in Jingdezhen, has rapidly grown to at least 301 projects in about 91 cities. The protests have exacerbated the country’s real estate woes and threaten to derail attempts to revive the market amid an economic slowdown.
MSN/South China Morning Post headline: China deploys bad-loans expert to clean up Henan’s festering banking and property mess
Iris Ouyang - Yesterday 1:33 AM
Henan Asset Management Corporation (AMC) appears to be one of the first local AMCs to help tackle difficulties of property developers in the current round of crisis
A proposed rescue fund is expected to focus on ensuring delivery of properties, analyst says
Henan AMC is 40-per cent owned by Henan Investment Corporation, the provincial investment platform in central China. Its involvement underscores how local authorities are responding to Premier Li Keqiang’s instructions to fix the simmering banking and property crisis that is spreading throughout the country.
Henan’s provincial capital Zhengzhou is ground zero in the mess, where a banking scam by local fraudsters has combined with a mortgage boycott by disgruntled homebuyers. The scam has run up a tally of 40 billion yuan (US$6 billion) in missing bank deposits and a rare protest by nearly 1,000 depositors. Henan, the home province of China Evergrande Group’s founder Xu Jiayin, also had more unfinished residential projects than anywhere else in China, according to mainland Chinese media.
Wow! That’s a real mess.