Economist Podcasts Variable-fate mortgage: China’s protests
Jul 20, 2022
Don Wineland, China business and finance editor for The Economist, discusses the ongoing turmoil in China's property market, where homebuyers are refusing mortgage payments amid impressive developer failures like Evergrande. He highlights potential economic repercussions and societal unrest. Shishan Joshi, Defense editor at The Economist, dives into the impactful use of HIMARS missiles in Ukraine, revealing how these systems disrupt Russian logistics and change the course of the conflict as Russia struggles to adapt to new dynamics.
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China's Property Crisis
- China's property sector is struggling as developers face debt restrictions and construction halts.
- Homebuyers are refusing mortgage payments due to unfinished projects, impacting economic growth.
Banking Scandal and Protests
- Protests have erupted in Hunan province over a banking scandal where depositors lost their savings.
- The government is attempting to resolve both the mortgage and banking crises, but significant financial losses are expected.
Systemic Risks and Political Pressure
- These protests reveal systemic risks in China's financial system, exacerbated by the zero-COVID policy.
- The timing is critical as these issues arise before the party congress, where Xi Jinping is expected to secure a third term.