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.
Original headline says “(foolishly)” but that’s too cringe to put in the title lol
Apparently forcing the owners to pay for the debt and liquidating the company when they can’t instead of bailing them out like capitalist countries do is “foolish” because it prioritizes regular people over capitalists (who could’ve guessed Xi would do that :0)
And the way I read it, if the government buys the properties, that means the people who previously owned them would get paid off. They would be made whole. The author goes on to suggest an alternative that would have let the scheme continue and gradually wind down in order to not cause people to lose their shirts, but fails to realize that buying their properties (at a fair value) achieves the same result but quicker, and likely more efficiently. The one thing that I think makes sense is that the CPC really sat on their hands for too long with this one. BTW, they could have created a national pension system in exchange for blowing up this bubble, which would have probably worked better than a buyout but Xi doesn’t believe in welfare so…
Original headline says “(foolishly)” but that’s too cringe to put in the title lol
Apparently forcing the owners to pay for the debt and liquidating the company when they can’t instead of bailing them out like capitalist countries do is “foolish” because it prioritizes regular people over capitalists (who could’ve guessed Xi would do that :0)
And the way I read it, if the government buys the properties, that means the people who previously owned them would get paid off. They would be made whole. The author goes on to suggest an alternative that would have let the scheme continue and gradually wind down in order to not cause people to lose their shirts, but fails to realize that buying their properties (at a fair value) achieves the same result but quicker, and likely more efficiently. The one thing that I think makes sense is that the CPC really sat on their hands for too long with this one. BTW, they could have created a national pension system in exchange for blowing up this bubble, which would have probably worked better than a buyout but Xi doesn’t believe in welfare so…