Beijing wanted to cool its housing market, but created a bigger problem, as the fallout from debt-laden developers and sinking sales spreads to the broader economy.
A model Chinese property developer in a sector replete with risk takers is teetering on the edge of default. Short of cash, one of China’s biggest asset managers has missed payments to investors. And billions of dollars have flowed out of the country’s stock markets.
In China, August has been a dizzying ride.
What started three years ago as a crackdown on risky business behavior by home builders, and then an ensuing housing slowdown, has spiraled rapidly this month. The broader economy has been threatened, and the confidence of consumers, businesses and investors undermined. So far, China’s typically hands-on policymakers have done little to ease anxieties and seem determined to reduce the country’s economic reliance on real estate.
Those buildings were pretty wild though. As an American, I relate to them this way: a lot of China’s prosperity is recent, within the last couple of decades. You’ll see some of the same stuff in America but with respect to much older achievements that were neglected. Both are the result of local governments falling asleep at the wheel or specific politicians ignoring problems to make themselves look better, at least temporarily. In other words, same shit, different day.
Since this is Lemmy, I guess I should say this isn’t a “both sides” thing. It’s a “this is being human” thing. I suppose the difference between the two is China will censor stuff for civic harmony while US media will blow everything wildly out of proportion to drive rage clicks. So there’s that.
Yeah it’s a lot of guys getting sweetheart contracts from government construction initiatives, then skimping on materials to pocket as much cash as possible. Capitalism/cronyism doing its thing