Too soon to say. Policy plays a big roles here and chinese policy debates are mysterious. It's possible they want to crash the real estate market, and reverse out of the appreciating real estate setup. Trade off between middle class wealth accumulation and housing affordability.
They're currently reversing out of the college cram school thing. There's some sort of similarity here.
> Will this be the Chinese version of Japan's real-estate crash of the '90s...?
If we are lucky? Otherwise, it could be much worse than that. Vancouver, the Bay Area, and LA got hit hard by Japan's real estate crash, I wonder if history will repeat?
GDP decline of 2-5%, recession: Chinese real estate is 70% of household wealth, and 30% of GDP. Likely these #s are worse, since the government obfuscates data. Home sales is already down 30% y/y.
Pressure on tech and other industries in China: Xi Jing Ping will officially be a dictator, come party congress 2022. Tech and real estate are industries owned by the oligarchs of Shanghai faction, which is against Xi Jing Ping.
Even more societal lockdowns: In the last few months, there were silencing of a #metoo incident, scrubbing of a famous actress from internet, removing discussions of evergrande bankruptcy, and disappearing/reapperance of alibaba's ceo. Look for more of these.
No war attempt on Taiwan in the near future: between real estate collapse, economic decline, coal shortage, food shortage, inflation, huge debts, and covid waves/lockdowns, CCP won't have any appetite.
Suicidal war attempt on Taiwan: CCP may get desperate when riots broke out, or need a victory to focus its citizen's outrage elsewhere. Then they'll face the combined forces of western countries, and will have to suffer through economic sanctions.
By what mechanism? Most of the world more or less officially recognizes China's claim on Taiwan. I think it would be horrifically sad and disappointing, but more or less ignored, like Hong Kong.
China will choose internal stability over external connections. Internal investors (party officials, chineses companies and private investors will receive partial reparations for their lost investments - or goods (flats etc.)
International Investors like BlackRock will take a massive bath.
Evergrande bondholders say they have not received $148m interest payments https://www.ft.com/content/88dcb535-3945-4138-b394-dda82292b...
Basically, selective default by Evergrande. Full official default likely very soon, and for most of the Chinese real estate companies.
加速加速加速 更快看到结局