1/6
The construction of subsidized rental housing will be a priority of the current 5 Year Plan, but while some argue that this could help stabilize the real estate industry, the current estimates for construction seem too small to make a huge impact.
caixinglobal.com/2022-02-15/in-…
The construction of subsidized rental housing will be a priority of the current 5 Year Plan, but while some argue that this could help stabilize the real estate industry, the current estimates for construction seem too small to make a huge impact.
caixinglobal.com/2022-02-15/in-…
2/6
As Caixin puts it: "The effect of subsidized rental housing in counterbalancing the real estate investment slump should not be overestimated, and the slowing of real estate investment growth is irreversible."
As Caixin puts it: "The effect of subsidized rental housing in counterbalancing the real estate investment slump should not be overestimated, and the slowing of real estate investment growth is irreversible."
3/6
The good news is that subsidized housing is one of the most efficient ways to transfer income from local governments to the poor (assuming it is done with reasonable efficiency).
The good news is that subsidized housing is one of the most efficient ways to transfer income from local governments to the poor (assuming it is done with reasonable efficiency).
4/6
The bad news, however, is that by relieving pressure on working-class Chinese to get on the property ladder, the construction of affordable housing will put downward pressure on property prices and so exacerbate the current overvaluation of Chinese residential real estate.
The bad news, however, is that by relieving pressure on working-class Chinese to get on the property ladder, the construction of affordable housing will put downward pressure on property prices and so exacerbate the current overvaluation of Chinese residential real estate.
5/6
I figure this overvaluation exceeds 100-150% of GDP compared to the US and Europe, and a lot more compared to other developing countries. Eventually this overvaluation has to be wrung out of the economy, and this means a direct hit to banks and household savings.
I figure this overvaluation exceeds 100-150% of GDP compared to the US and Europe, and a lot more compared to other developing countries. Eventually this overvaluation has to be wrung out of the economy, and this means a direct hit to banks and household savings.
6/6
As I explain in my recent piece on debt, one of the greatest costs of runaway debt is the extent to which it creates or accommodates the creation of fictitious wealth (bezzle). This is clearly a major problem in China.
carnegieendowment.org/chinafinancial…
As I explain in my recent piece on debt, one of the greatest costs of runaway debt is the extent to which it creates or accommodates the creation of fictitious wealth (bezzle). This is clearly a major problem in China.
carnegieendowment.org/chinafinancial…
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