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Chinese city eases rules for developers amid cash crunch

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Home sales and property loans. The two biggest pitfalls there is. Home that are sold but are never build by these big giant company and loans that eventually force you to work till you die trying to repay it. But i can guarantee you that people would still willingly jump into these pitfalls.

2 ( +2 / -0 )

Buying off plan is a disaster waiting to happen as so many in China have discovered, especially as they have to pay up front rather than on completion, so when the dodgy developer fails to build or complete the development they are left destitute having lost in many cases a lifetimes savings.

Whether the CCP can manage this to a soft landing or whether it will all crash and burn is yet to be seen. Doesn’t look promising at the moment.

1 ( +1 / -0 )

Looks like Beijing are starting to realise just how much trouble they are in. Being a Communist dictatorship, they lack ability and experience in this area, on top of having to deal with the nefarious exploitation, fraud and insane indebtedness that easy money creates, regardless of the regime.

In the West, people suffer when this happens. It is part of an accepted system of personal risk inherent in capitalism. But in China, this sort of thing would suggest that the CCP have failed, as they paint themselves as being in benevolent control. They will need scapegoats, and they will need to find a way to manage the pain. The social contract in China is a simple one. The people tolerate intrusion into their lives and never growing up or taking responsibility for what happens at the ballot box, in return for the comprehensive paternal protection of the state - the 'red hug'. Sectorial economic failures break this model, and sectorial economic failures look to be part of the 'new normal'.

An accurate documentary account of how they deal with this would be interesting.

2 ( +3 / -1 )

lol. Looks like Xi's "Red Lines" in property development were about as steadfast as Obama's "Red Line" on chemical weapons use in Syria, right?

Look up the Chinese term "tofu dreg" on youtube, to see what you, too, can own should you choose to buy one of these quick-done fire sale Chinese construction projects. (Even if you don't actually own any property in China, remember, just a long-term lease that can be terminated at any time by the government.)

The Chinese House of Cards comes crumbling down like a house made of...Tofu! See the first jiggles in this government walk-back of its own strict rules not even a year old...

0 ( +2 / -2 )

Being a Communist dictatorship, they lack ability and experience in this area, 

The people who today should be China's experienced mid and top level scientists, engineers, economists, bankers and the like were all either killed or sent fleeing abroad by the Red Guards. Much of their educated people from that era are lost so they lack that cadre of highly experienced, time tested and grizzled leaders who have been there and done that many times over. Even their college grads are questionable. Once the Red Guard's reign of terror was over my wife could pass the entry exams for a Chinese university but her mother being poor didn't have money to put in those decorative red envelopes the Chinese give cash gifts in so she could get the classes she wanted from admissions or to pay off the professors to pass her. Instead she came to the US, worked three jobs and got her engineering degree honestly while raising a daughter. China's loss and symbolic of a whole generation of people who today should be leading China and avoiding these problems.

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On Friday one of the biggest real estate company from Japan Daiwa house group bought a piece of land in Suzhou for 45 billion Japanese yen

1 ( +1 / -0 )

 Being a Communist dictatorship, they lack ability and experience in this area...

Indeed, they can't avoid this real-estate lending crisis like we in the West did so expertly in 2008 and Japan did in 1992, etc., etc.

0 ( +0 / -0 )

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