The news of the financial crisis of real estate giant Evergrande Group is a shock to China's consumers.
How long can Evergrande last? Is it the beginning of China's real estate industry slipping into crisis after more than two decades of prosperous development?
In order to maintain high economic growth, China promoted infrastructure construction and real estate development, thereby stimulating a round of booming construction projects.
If we compare the ratio of real estate investment in GDP, China's real estate bubble is equivalent to twice the size of the Heisei economic bubble in Japan, and the real estate bubble during the U.S. subprime mortgage crisis is only a fraction of China's real estate bubble.
When the working class could no longer afford a house, the real estate industry continued to expand-that represents the bubble of real estate assets.
Beijing authorities have been facing an economic policy dilemma since 2017: to curb the overheating real estate market or to prevent the real estate bubble from bursting.
Once the real estate tax is introduced, people who own multiple properties would sell them in order to avoid paying the real estate tax.
Tuesday, September 21, 2021
What Evergrande's Troubles Reveal About China's Real Estate Industry and Economy
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