Wolfstreet Report – de ineenstorting van het Chinese systeem
Het Wolfstreet Report kijkt naar het crashende Chinese model van geforceerde groei, dat nu zijn einde beleven gaat.
De Chinese economische groeicijfers werden aangejaagd door de ontwikkelingen van prijzen van onroerend goed – in China. Nu de Evergrande bubbel naar zijn einde gaat, dreigt dit hele systeem te bezwijken.
Publicatie 17 oktober
Volledige transcriptie van dit Wolfstreet report
It’s mind-boggling just how important the residential property sector is to the Chinese economy, to what extent government-dictated economic growth was achieved by building more apartment towers, and it’s even more mind-boggling how much debt residential property developers have racked up, and how much household wealth is tied up in the property sector at multiple levels.
Then there are the demographic headwinds the property sector has been facing for years, that are coming to the forefront.
So now there is a property crisis in China that is making the US mortgage crisis of 2008 look like child’s play in terms of magnitude.
The central government has been trying to deal with rampant real estate speculation and prevent it from going even more haywire and take down the financial system and the economy.
In August last year, the government introduced limits on corporate borrowing, known as the “three red lines,” which forced some overleveraged property developers to begin to deleverage. The government also put into effect other policy tools, such as curbs on mortgage lending.
Now we’re a year down the road. Numerous property developers are in the process of defaulting on their debts. The most indebted one of them, Evergrande, has turned into a total fiasco. It has over $300 billion in known liabilities, plus, according to Goldman Sachs, $156 billion in off-balance sheet debt and contingent liabilities.
Authorities are busy trying to prevent financial contagion and a financial crisis. And they have some unique controls to prevent a classic financial crisis:
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