The Intelligence from The Economist Variable-fate mortgage: China’s protests
Jul 20, 2022
Don Wineland, the China business and finance editor for The Economist, delves into the repercussions of the property crisis in China. He discusses the alarming trend of homebuyers boycotting mortgages in response to unfinished construction projects. The mounting protests highlight widespread discontent with government economic policies and the banking sector's instability. Wineland also touches on the implications of these civil unrest events on China's future, revealing the core struggles citizens face amid these financial upheavals.
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China's Property Crisis
- China's property sector is struggling due to debt restrictions on developers, leading to stalled projects.
- Homebuyers are refusing to pay mortgages on undelivered homes, impacting thousands of projects nationwide.
Hunan Bank Scandal
- Protests erupted in Hunan province after several banks misappropriated depositors' funds.
- Violent clashes occurred between protesters and security forces, highlighting financial instability.
Connecting the Protests
- Both the mortgage boycotts and the Hunan protests stem from people's frustration over losing their savings.
- The government's response includes pushing banks to lend more to developers and considering mortgage grace periods.