Don’t pretend like the average person in China is a fucking real-estate investor. This investment money is from the middle class and up i.e. people who don’t need to be rescued. They’re going to be fine. Even if their investments all go up in smoke, they won’t be homeless. Common people just spend their paychecks and keep a little aside for savings, like everywhere else in the world.
My understanding is many everyday Chinese people bought real estate that wasn’t yet built because demand was so high. Supposedly many of them sunk their whole life savings into units that developers had promised to build at some future point. That point seems unlikely to come if those developers go bankrupt, meaning that some decently large number of everyday people are going to lose their life savings.
My understanding is middle class Chinese people bought real estate because they wanted passive income from investing in real-estate. China shouldn’t have allowed them to do that but the solution isn’t to bail out these developers. The actual solution is to make sure these people do not end up destitute because they wasted their money on gambling.
That’s call investnent risk that investors bears why should their losses be subsidized via loans on entire taxpayers?
Ironic how China is more less interventionist than US now where we bail out the owner class every single time
Sorry, so the people who saved up to buy a home that couldn’t be built until later due to demand are now investors?
I don’t think they owned any stock in a company.
They had contracts for homes, right?
