Inside China’s Property Collapse (Evergrande Disaster)

In any economic collapse, only common people suffer.

One of the factors contributing to the "overcounting" problem in China is likely the fact that authorities often chase results and numbers. Bigger numbers = bigger praise and rewards for officials. I would know. I'm a Vietnamese. The authorities here love chasing numbers for rewards from the government.

Around the early 10s, when I was an American high schooler, I read something about how there was all this massive investment in real estate in china, even when houses were just staying vacant. With the subprime mortgage crisis fresh in our minds, I had a feeling I'd be hearing about this again in the future, and in a bad, bad way. And lo, here we are. Time is a flat circle.

Important difference about buying a home in China: the buyer start paying the mortgage as soon as they buy, NOT when the home is completed and the sale is closed. So the buyers have been paying mortgage for a home with no completion timeline in sight...some have been paying for years.

I'm surprised you did not mention the central government targeted GDP rate that the rest of the province/territories have to meet at any cost. Which also includes provincial government using the sale of land to developers to drive their GDP targets and extensive infrastructure projects that have little to no purpose. Which also drives the Provincial debt higher, and this debt is far greater than that of the developers.

When a person tries to control every aspect of a society, then that society will only be as strong as that individual.

It is truly concerning when the biggest real estate developer, Country Garden, fails to repay its creditors or deliver the housing units it promised. It's really really bad when the largest state-owned financial firms, Zhongrong, cannot repay their investors because their investments haven't paid them back yet... the dominos have started to fall.

Cold Fusion is one of the best narrators on YouTube, period!

The fact that you separate the human people who have been affected away from any preconceptions about the CCP/China is one of the reasons I love this channel. End of the day, your average human has lost thousands of their money hoping to invest in their own future on promises sold to them.

When an entire economic sector is based on extreme leverage, and you manage to piss off both the regular person AND the bigwigs, well, what do you think is going to happen? It's not a matter of if you'll fail, or even when. The question to be asked is, "what will fail first?"

What is the evidence that Evergrande was planning based on the population growth estimates? It seemed more like they were simply in a real estate bubble because everyone kept buying properties as investments and they could get the loans to keep it going.

There's also the fact that local governments encouraged overdevelopment as a remedy for their perennial fiscal deficits, as taxes are collected by the central government and only 30% of tax receipts are remitted to provincial and local governments when they bear the burden of social spending.

You can't blame population estimates when ghost cities were dotting the countryside. This was an obvious bubble.

So, it turns out that strangling future population growth also strangles future economic growth. Having a two-child policy to maintain current population numbers instead of a one-child policy to reduce them wouldn't have been quite so economically devastating in the long run.

China is a real dystopian nightmare. God bless those poor citizens that lost everything. Poor sods.

I live in SEA and one thing I noticed about Chinese businesses growth strategy usually comes down to GO BIG OR GO HOME. Most companies tend to dump crazy amount of money wherever they invade early on, trying to secure market lead. This meant accept massive loss for potential growth. This seem to be the way they believe to gain strong foundation in the market, however, their business mindset only see growth on growth. It also did not factor in how consumers are emotional beings and each local market have unique ways of operating. None of this is ever going to sustainable.

David Attenborough asking a simple question leading to all of this is some Butterfly Effect level stuff

In other words, Evergrande's lack of transparency and deceptive data mirror that of the CCP. They had the perfect model.

You kind of touched on it at the end of the video. I watched a documentary on this a while back....maybe on the DW Documentaries channel. The biggest problem is that the population was expected to start paying on their mortgages before the construction even started on their home. In a lot of cases they was a year or more in advance and to had gotten to be the norm for the way the real estate market worked in China. The population had enough and just stopped paying their loans so they would go into default. That's what really killed these companies.

All of this was predicted two decades ago and absolutely nothing was done to even slow it down until 2020 when there was nothing that could be done except just to let the chips fall where they may and once the dust settles then start over.