China's housing minister says real estate developers must go bankrupt if necessary
China's struggling property developers won't be getting a major bailout, authorities indicated, warning that those who "harm the interests of the masses" will be punished.
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Yes but can they please do this without leaving half finished skyscrapers in other countries? The situation in LA kind of sucks now that the city has to spend millions cleaning it up (supposedly sending the bill to a bankrupt Chinese developer, as if that'll work).
China has said they are going to take over projects under construction to finish them, which is good.
However, China still has to deal with a property glut, an elderly population who mainly used real estate to save for retirement, and local governments who needed real estate development to fund their budgets.
China is going to have to spend significant parts of its surplus dealing with this.
A property glut? Look at China's urbanization rate. A short-term oversupply is easily consumed by increasing urbanization. You cannot apply the American model to an economy in a different state of development.
This has been an internal Chinese determination. China has stopped building large skyscrapers and mass transit with this being determined on the national level since pre-Covid.
They don't "have to" clean up the totally innocuous graffiti
This is true. It's become a bit of a tourist attraction.
The value of the property has to be greater than the bill though, right?
No, and that's the problem. Ever since Covid, people are leaving major cities and moving to more affordable locations. This is largely due to this new work from home culture. Thus, a lot of these grand skyscraper projects are falling apart globally, the news just likes to focus on China, which in fairness is the largest failure of all the nations.
It's also important to note that while there is an abandoned skyscraper by a Chinese developer in LA, there are also abandoned skyscrapers in NYC and SF that has nothing to do with China. It's just a bad market for new buildings since people are leaving cities.
Of the finished property, probably. A property with a giant, abandoned project on it isn't worth nearly as much.