Originally Posted by
henra
That's the mysterious part: Where the hell is the sudden rush coming from? Is Xi nervous that a collapse of the Chinese Bubble (Stock markets, Real estate/Housing + Industrial base moving to cheaper Countries) is getting nearer?
China is in the throes of what arguably is the world’s largest ever property bubble. Significant speculative purchase of properties has taken place over the last few years, with developers pocketing full payment and moving to start and break ground on new developments before finishing the just purchased units (the model in China allows for payment to the developer prior to completion), resulting in lots of part built developments across the country. This in essence, shifts the risk from the developer to the banking sector and the buyer. The banks in China are verymuch on the hook with the property market.
The construction sector has reached being 30% of GDP, compare that to high 20’s% for both Spain and Ireland at the time of the bursting of their bubbles.
A lot of domestic wealth will be destroyed when the bubble pops and that will be a big challenge to the Communmist Party. The Party has decided it’s time to act … but it may already be too late. Perhaps a nationalistic distraction may help.
From Reuters, 20th October 2021
China's new home prices stalled for the first time since February 2020 in September, as the chill in the property market intensified amid tightening credit due to an ongoing crackdown on speculative investment.
https://www.reuters.com/world/china/...on-2021-10-20/
JAS