It is just a plan. The problem is who is going to fund those new homes bulding. The vacancy rate of apartments in China is already extremely high. The banks have already lent their money over the limits. The credit risk control put in place by the banks is not functioning most of the time. So, high default rate of Loans is expected and The banks will call for help from the central government again.
The government has to continue to print more money to put into the economy. However, now the inflation is extremely high and more importantly the social stability is undermined by the high inflation. The government is now forced to curb the inflation.Now the government faces two sources of pressure: one from the problems of the banking system and the other from inflation problems. The government chooses to control the inflation by directly order commodity supplier and resellers not to raise their prices while it continues to pump more liquidity into the economy. This is not going to be sustainable in the medium or long term. So, the stagnation will be the result of these.
Australian economy relies too much on China's market and will also be negatively affected.
