46 comments

  1. The site cost is excessive and is a huge element of government and local authority revenue receipts.
    This is a false economic system. China needs regular income levels with regular income tax and appropriate real estate costs.

  2. How much is the total debt owed by Chinese developers? Around 5 trillion or so? That’s what I’ve seen somewhere. I have a feeling that Chinese developers will end up sucking out all of Chinese accumulated wealth and paying it to foreign investors.

  3. Looks like the Chinese government will be left holding the biggest bag of odorous excrements ever assembled in the history of fake capitalism. To paraphrase John Fuld from margin call.

  4. Here is how their Ponzi Scheme works:

    First. The local government evict all residents. Then issue 70 year leases to build. Say, they charge the builder 10 million dollars for a parcel.

    Second. The local government spends these multiple of Tens of millions to build Roads, Bridges, High Speed Rails, Schools, Hospitals, etc. They accept big bribes to issue contracts to builders.

    Third. Those who bought the land leases builds 30 story apartment buildings. 12 units per floor and total of 10 buildings. 30 X 12 X 10 = 3,600 total apartment units on One of those 10 million dollar parcels. Big Brand Name Developers can start to sell these 3,600 units even before construction starts. They receive big lump sum Deposits. They take the money and send them overseas and share some with government officials. They subcontract out the construction to various smaller builders. They use some of their cash and loans from banks with these apartments as collateral. And they continue this over and over again.

    Fourth. With many projects in existence, they file IPO, and obtain large gain on their share value with usually doctored up financial statements. They issue Bonds as well. This continues over and over.

    Fifth. Developers have no money to finish all their pending projects. All the money has been stashed. They need new projects to get cash to continue building their pending constructions.

    This is Ponzi Scheme.

  5. I seriously hope all housing prices worldwide crashes bigtime. I don't care of the consequences.

    I rather have the houses filled with people who need a home, rather than being empty. Home owners, and not renting.

    I hope to own a home one day, but it seems more like a fantasy dream with each passing day, unless the housing prices crash.

  6. I think this is just a way to get money from foreigners and never paying back. So they can break the lenders and keep the cash. Communist country will have no private owned companies… am I wrong?

  7. Crazy i remember watching china build these ghost cities 10yrs ago with no potential buyers in mind, guess its like cooking a xmas dinner with no guests coming to eat

  8. You forgot to mentioned that Evergrande and like learned from the pyramid scheme that was the US housing bubble in the 80's. The fuel for the expansion was greed of regime prior to Xi and Hong Kong Billionaires.

  9. As long as people don't lose faith and property keeps appreciating, the bubble can go on forever. The biggest test was Covid, and China came out without a scratch. Welcome to the "Everlasting Chinese Bubble".

  10. I would argue that the Chinese Real Estate Bubble will be even worse than Japan’s. Why? Because while Japan’s debt to GDP was over 200% by the time the bubble popped, China’s could be as high as over 400% if you count debts to non-state banks which local governments there depend on.

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