The Chinese game of Musical chairs
Who is not getting a house they paid for!
What happens when people who paid for a housethey will never get, stop paying the banks?
What happens when local governmentcannot pay for services as they cannot sell more leases for the property development?
Legal systems in China might not bebalanced or looking for the truth?
A collection of random stories which may not be random.
Andrew Left 2012 Evergrande report
MrLeft, the founder of Citron Research, was banned from trading in the Hong Kongmarkets after he published a 2012 report predicting that Evergrandewould soon be insolvent.
CitronResearch short seller Andrew Left on Evergrande debt crisis (cnbc.com)
Andrew was sued by government in China ( Hong Kong ) for his 2012 report. He lost the case and appeals! Evergrande is still possibly the most indebted companies in the world and not paying its bills and unlikely to ever finish the thousands of huge property developments it arranged in a scheme which seem a lot like a Ponzi scheme? Andrew legal costs where in the millions!
The coming Chinese bear trap?
Local governments in China pay for … mostly or entirelyvia LGFPs which are almost entirely funded by the sale of land or really a longterm lease of land for property development
Local government financing platforms (LGFPs) are the backbone of local governments in promotinginfrastructure development in China. As the principal financing agents forlocal governments, their crucial role in upgrading China’s infrastructure andpromoting economic growth has been widely acknowledged. By not encouraginghigher local fiscal deficits or imposing more pressure on local government toissue bonds, LGFPs could, to some extent, be seen as a fortune for Chineselocal governments, as they act as a vehicle to provide off-balance sheet quasi-fiscalsupport for local governments.
Link
Local government financing platforms (LGFPs) are almost the only funding source of Local Governmentin China!
China’s ‘rotten-tail buildings’: homebuyers in limbo for years with no home due to dodgy developers and red tape
· A surveyconducted this year found over 45 per cent of homebuyers in mainland Chinaencounter unfinished building problems
· Unfinished or ‘rotten-tail buildings’, as they areknown in China, usually have no electricity, no running water, lifts that donot work and no sewage system
Sweeping Mortgage Boycott Changes the Face of Dissent in China
Angry homebuyers havelaunched one of the most effective protests the country has ever seen.
Bloomberg News
3 August 2022 at 10:00 am AEST
Personal bankruptcy There has been no law passedgoverning individual bankruptcy in China
There’s a run on Chinese banks and it’s being ignored by the world
By Henry Chia On Jun 12,2022
There'sa run on Chinese banks and it's being ignored by the world | Asia Markets
The bankruptcy regime was a major milestone for China. For the first time in its history, China now has a unified and comprehensive bankruptcy system covering all types of enterprises, including foreign investment vehicles and state-owned enterprises. Similar to many jurisdictions, the bankruptcy regime uses key concepts such as: Voluntary and involuntary bankruptcy; An independent administrator; Involvement of creditors in the administration of the bankruptcy; Restructuring and settlement; Extraterritoriality, allowing property outside China and certain foreign proceedings to fall within the regime; Voidable transactions; and Ratable distribution. A significant feature of the legislation relates to the protection of workers’ rights. The regime ranks employees ahead of other unsecured creditors but behind secured creditors, who retain their priority over secured assets
https://restructuring.bakermckenzie.com/wp-content/uploads/sites/23/2019/02/Flyer-Enterprise-Bankruptcy-law-in-China-October-2018.pdf
Not suggesting I know just observing with interest. I hope you enjoy- Night all
