Xi (Foolishly) Plans Communist Answers For China’s Property Crisis.
www.forbes.com
Beijing's planned takeover of Chinese residential real estate might cloak the nation's property crisis, but it will surely kill China’s fundamental economic momentum.

If the leaks and rumors are true, Beijing stands ready to launch a new and radical solution to the economy’s property crisis – a government takeover. What the authorities refer to as “a new model” would replace the old emphasis on ownership with more rentals and use government funds to buy up bankrupt properties so that in time the government’s role in real estate would rise from 5% of the market at present to 30%. Such an act would surely take the nation back to its communist roots if not quite the days of Mao Zedong. If it would veil the property crisis for a time, it would in the long run do tremendous damage to China’s economic prospects.

xi-peel

  • context [fae/faer, fae/faer]
    ·
    10 months ago

    Beijing’s ability to manage real estate also comes into question after considering how poorly the authorities have managed things to date. Prior to 2020, Beijing actively encouraged residential real estate development, pushing local authorities to get involved and ensuring easy credit terms for both developers and homebuyers. Private builders and speculators responded actively, taking on debt and pursuing increasingly dubious projects so that even as China was meeting its housing needs, such development reached the astronomical level of some 30% of China’s economy. Then in 2020, Beijing abruptly removed all this support. Not surprisingly, the highly leveraged and extended developers began failing almost immediately.

    xi-lib-tears oh no! not the speculators! it would be a real shame if a bunch of capitalists lost tons of money and all we got out of it was all this housing that now we can buy up for cheap!

    • betelgeuse [comrade/them]
      ·
      10 months ago

      Since US prices are so high, they were salivating at a Chinese housing crisis. That way they could enter the Chinese market and buy up properties for cheap. But since the government is going to buy up the cheap homes, they can't enter the market. So now comes the propaganda tantrum about how there's no way this will work, it's evil, it's authoritarian.

      Problem is that shit only works on Americans. Appealing to Chinese people's sens of individualistic English property rights doesn't really work.

      • context [fae/faer, fae/faer]
        ·
        10 months ago

        you nailed it

        also forbes about u.s. commercial real estate:

        Finally, while it will be a tough year or two for the commercial real estate community, I expect the amount of capital on the sidelines will open up the market and create once-in-a-lifetime opportunities. As the old adage goes in real estate, "It is not the first or second but the third owner who makes money on a project." The opportunities will be plentiful, but the buyers will have to view the assets through a new lens.

      • Tankiedesantski [he/him]
        ·
        10 months ago

        Since US prices are so high, they were salivating at a Chinese housing crisis. That way they could enter the Chinese market and buy up properties for cheap. But since the government is going to buy up the cheap homes, they can't enter the market.

        Incompetent Chinese property developer: "I consent!"

        Soulless American hedge fund: "I consent!"

        The Communist Party of China: "Was there somebody you forgot to ask?"

        The myth of consensual market entry.

    • Zuzak [fae/faer, she/her]
      ·
      10 months ago

      Prior to 2020, Beijing actively encouraged residential real estate development. . . [Developers persued] increasingly dubious projects so that even as China was meeting its housing needs. . . Then in 2020, Beijing abruptly removed all this support.

      So they funded housing development until there were plenty of houses at which point they stopped funding more development and this is bad for some reason? What did they want them to do, continue encouraging development when there wasn't a need for it solely to prop up the investors?

      • BurgerPunk [he/him, comrade/them]
        ·
        10 months ago

        What did they want them to do, continue encouraging development when there wasn't a need for it solely to prop up the investors?

        Unironically yes. Liberalism is crazy

      • Rod_Blagojevic [none/use name]
        ·
        10 months ago

        If they had done that, then we could get more of the stories about the ghost cities that are the harbinger of China's imminent collapse. I've been reading those articles for decades. They've kept a lot of journalists busy.

        • Raebxeh
          ·
          10 months ago

          Imagine taking a city’s population growth chart, extrapolating the data out 5 years, and including the projected need to housing in your 5 year plan. These damn commies are way too prepared for predictable trends. Suspicious.

      • nilloc@discuss.tchncs.de
        ·
        10 months ago

        Well, they are leaving out how demand fell off a cliff after Beijing locked everyone in their high rise apartments for a year or more.

        • Zuzak [fae/faer, she/her]
          ·
          10 months ago

          Imagine the government listening to the science and using public health measures to save millions of lives instead of demanding everybody go die so the quarterly profits aren't interrupted.

          covid-coolsolidarityporky-happy

    • RyanGosling [none/use name]
      ·
      10 months ago

      gives capitalists the money and leniency to build a bunch of housing

      abruptly yoinks it from them after they’re built and tell them to fuck off

      subsidize the housing so people can live in it

      suswcc problem?