Gravitas: Chinese citizens boycott mortgages in 86 cities

IN 2008 the global economy crashed a
world changed forever in america lehman
brothers had collapsed
the bank was holding a giant pile of bad
debts mostly bad housing loans there was
an international banking crisis it gave
the world a recession 14 years later
another financial crisis is brewing in
china but the world knows very little
about it as we speak a boycott campaign
is underway in at least 86 chinese
cities thousands of home buyers have
stopped paying their emis
because they say they’ve not got their
homes so they will not pay back their
loans
china has asked its banks to produce a
list of bad debts there’s a growing risk
of more defaults china’s property sector
is on shaky ground banks have a debt
pile of more than nine trillion dollars
the money was lent out to the property
sector first leading the developers
defaulted and now home owners are
willfully defaulting on their loans
will a collapse of china’s property
sector start the next global financial
crisis on gravitas tonight we’ll tell
you how china could start a financial
pandemic
[Music]
[Music]
ah
what you saw happened last week a
protest in china crushed by officials
who were the protesters people who had
lost their life savings china’s banks
are going through a major crisis and
these are people from the henan province
in the month of april four banks in
henan stopped withdrawals
meaning people who had deposited money
in these banks could not withdraw
the people struggled for months they
protested at least thrice and every time
the chinese state responded with a
fierce crackdown
they tried their best to crush the
protest but they failed to silence the
protesters
china’s banking regulator has now
relented it will compensate these
depositors in henan it’s a massive climb
down for the chinese state and a win for
the people
but our story does not end there in fact
it just begins the hennan banks are just
the beginning of china’s nightmare there
are many more hidden skeletons chinese
banks have debt worth 9.2 trillion
dollars let me repeat that debt worth
9.2 trillion dollars this money was
given out to the distressed property
sector of china mostly to home buyers
but now the money is not coming back
because people have not got their homes
so they’ve stopped paying their emis the
scale of the problem is massive
this is a mortgage crisis a mortgage
revolt in china
home buyers in more than 50 chinese
cities are defaulting on their debts and
they are doing it willingly
we’ve said this before china’s debt
problem is like a cancer and this cancer
is now spreading through their economy
the repercussions could be grave and the
impact could be global on gravitas
tonight we’ll bring you the full story
we’ll tell you how the chinese economy
is tearing at a collapse
we’ll start with a mortgage boycott
look at this headline china mortgage
boycott data erased by sensors as crisis
spreads this story broke today
and when chinese sensors swing into
action
it is often an indication that there is
a big problem
these sensors took down some documents
what was in the documents data about
mortgage boycotts in the country
information about the projects that are
stalled images of letters by home buyers
are the people who declared they will
not be paying their emis anymore
and china is trying to hide all of this
data
so how big is the problem
in one word massive
we have estimates home buyers have
stopped mortgage payments in at least
100 projects
where are these projects in more than 50
cities numbers from the leaked data sets
suggest that the problem is much bigger
according to one report the boycott is
happening in as many as 86 cities
how many projects more than 230
how many people have stopped paying emis
in china we don’t have the exact numbers
but a chinese news outlet has published
a report it has pictures of the league
data set
now look at this
there are more than 80 entries on this
list alone 46 000 home buyers have
suspended payments in 14 projects 46 000
these projects are in central southern
and eastern china so people are refusing
to pay emis in 80 cities you can imagine
the scale of the crisis
why had they suspended payments because
they’ve not got their homes the ones
that they bought the developers have not
finished those projects most of these
projects have failed
and these projects belong to the
developers who recently defaulted the
biggest culprit
is the name you would recognize
evergrand it was the largest property
developer in china now it has the
largest debt pile in the world 35
percent of the projects facing a revolt
today belong to ever grant
home buyers have every right to be angry
if they’re not getting their homes why
should they keep paying their emis
and all of this is bad news for the
chinese state because if the boycotts
continue there will be more defaults
how much money are we talking about at
least 58 billion dollars
that’s the value of all the loans in
delayed housing projects
how will china revive these projects its
options are limited china’s property
sector has become one of its biggest
liabilities recent defaults have put
banks at risk the actual debt pile is
much bigger again i have some numbers
chinese banks have lent 9.2 trillion
dollars to the property sector
and more than half of these are mortgage
loans
in the last one year several developers
have defaulted 28 out of china’s top 100
developers have either defaulted have
either failed to pay their loans or
sought an extension from their creditors
now here’s why we say that the recovery
is going to be tough in the first half
of this year 2022 property sales
plummeted in china by 72 percent in one
year
72 drop chinese regulators are pressing
the panic button they’ve told banks to
come clean china wants to know how big
the mortgage debt pile is
there are plans to infuse cash into the
economy reports say beijing could pump
1.1 trillion dollars
this money will go into infrastructure
projects it will lift the construction
sector and by extension lift the chinese
economy at least that’s the hope
chinese regulators say they will help
the property sector too
but there’s no plan yet
housing projects going bust borrowers
unable to repay debt and banks fearing a
collapse we’ve seen all of this before
this is exactly what happened in the
year 2008 the subprime mortgage crisis
in america that’s what it was
it gave the world a recession going by
one estimate over two million homes
went through a foreclosure then
how much did american households lose at
least 17 trillion dollars in all
what’s happening in china is ee really
similar to america’s subprime crisis the
bigger problem is the fact that china is
trying to hide all of it
the world needs to know about china’s
bad loans in 2020 it hit the spread of
the wuhan virus and the world got a
pandemic
in 2022 china is hiding another crisis
that could give us a financial pandemic

 

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