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Russian
00:00:01
gonna be talking about china's massive00:00:03
meltdown that's potentially gonna happen00:00:05
in the next few months as we've all seen00:00:06
the stock market has been going down00:00:08
real estate prices have been going down00:00:09
mortgages have been increasing but00:00:11
that's here in the united states over in00:00:12
china things are much much worse in this00:00:15
video by business basics we're gonna be00:00:16
seeing china's mortgage crisis how banks00:00:18
are failing how there's protests00:00:19
everywhere and how china's financial00:00:21
crisis is here so without further ado00:00:22
let's hop on in in 1989 the ccp did00:00:26
something that shocked the entire world00:00:31
yeah this is wild and the crazy thing is00:00:32
they actually censored this stuff in00:00:34
china for the longest time so you could00:00:35
not find images of this japanese00:00:38
massacre anywhere if you were in china00:00:39
china's democracy protests were00:00:41
threatening the ccp's rule it made them00:00:44
scared00:00:46
so scared that the ccp decided to launch00:00:48
an attack against its own citizens to00:00:51
silence the protests00:00:53
in the process00:00:55
thousands of innocent chinese students00:00:56
were well i didn't know it was 10 00000:00:58
people that's pretty well killed and00:01:00
thousands more were wounded00:01:02
in the last few weeks something similar00:01:05
has been happening in china that is00:01:07
scaring the ccp00:01:13
on july 14th over a thousand victimized00:01:15
owners of rotten tail buildings00:01:17
unfinished projects in xi'an china00:01:18
surrounded by shanxi building and00:01:20
insurance regulatory commission protest00:01:22
so in the past few years a lot of00:01:24
properties were being created right like00:01:26
a lot of real estate was being developed00:01:27
in the hopes that they would sell the00:01:28
properties off and then use those funds00:01:30
to build new developments et cetera et00:01:31
cetera but over the past few years00:01:32
people were just not moving into the00:01:34
buildings i guess properties weren't00:01:35
being completed and you also have some00:01:36
buildings that were completed but people00:01:38
weren't moving in so you just have a00:01:39
bunch of vacant buildings in there and00:01:40
because these projects were unfinished00:01:42
or there's only half the people moving00:01:43
into them the developers just didn't00:01:45
maintain them very well so these00:01:47
properties aren't doing very well00:01:48
chinese citizens across the country took00:01:50
to social media to do something that has00:01:52
never been done before thousands of00:01:54
would-be homeowners pushed for a00:01:56
movement to stop paying mortgages on00:01:59
their homes in an attempt to put00:02:01
pressure on the ccp and banks to treat00:02:03
them fairly00:02:04
protests broke out in multiple cities00:02:07
and the crusade seems to be gaining more00:02:10
and more momentum each day the ccp is so00:02:13
worried that it has already sent out00:02:15
tanks to maintain stability00:02:20
[Music]00:02:27
for the first time in more than 30 years00:02:30
the ccp is fearing for its existence00:02:33
and it all has to do with china's real00:02:35
estate bubble00:02:37
according to one expert the ccp sees00:02:40
this situation as a political protest00:02:42
not a banking crisis00:02:44
government officials are extremely00:02:46
fearful about how this might turn out00:02:48
but one country could already be facing00:02:50
a recession and that is china a massive00:02:53
protest over frozen bank deposits00:02:56
hundreds gathered in zhengzhou big00:02:58
chinese banks are at risk over nine00:03:01
trillion dollars in loans are a danger00:03:03
of defaults and if the situation gets00:03:05
any worse this could foretell the00:03:07
collapse of china00:03:09
and the ccp00:03:11
this mortgage crisis isn't the only00:03:12
crisis the ccp is dealing with zero00:03:15
cobit policies and bank deposit scams in00:03:18
hanan00:03:19
pose a big risk to china's fragile00:03:21
economy too00:03:23
but this mortgage situation is by far00:03:25
the biggest threat as it affects00:03:27
trillions of dollars involves some of00:03:29
the most important industries like00:03:31
banking and real estate00:03:33
and influences millions of households in00:03:35
the country00:03:36
according to a well-respected expert00:03:38
this mortgage crisis could be a hundred00:03:41
times worse than the 2008 financial00:03:43
crisis here in uncle sam's america it's00:03:47
considered to be an important part of00:03:48
the american dream to own a home00:03:50
but slowly it's getting less popular00:03:53
among newer generations to do so because00:03:56
well it's not very affordable00:03:58
china on the other hand is different the00:04:01
importance of owning a house has only00:04:03
gone up in the past couple of decades00:04:05
real estate is one of the asset classes00:04:08
that the public trusts more than00:04:09
anything there's a lot of chinese00:04:11
investors that actually buy properties00:04:12
here in the united states and they buy00:04:14
it with cash and they leave the00:04:15
properties vacant for many years they do00:04:16
this because they don't trust the00:04:18
chinese government's economy and they00:04:19
don't trust the stability of the chinese00:04:21
yuan so they want to keep their money in00:04:22
united states dollars but more00:04:23
importantly they won't keep it in real00:04:24
estate because they believe that the00:04:26
asset itself will appreciate but they00:04:27
don't want to rent out tenants because00:04:28
they don't want the property to be like00:04:30
ruined you know they want to hold on to00:04:31
these properties for 10 plus years then00:04:32
move their family into it whenever they00:04:34
have their green cards and real estate00:04:35
ownership has been a very important00:04:38
cultural significance to the chinese00:04:40
people real estate to chinese people00:04:42
signifies wealth so a lot of chinese00:04:44
people love buying real estate myself00:04:45
included families use real estate as a00:04:47
way to plan for their retirement00:04:49
guys with real estate are considered00:04:51
attractive choices for marriage and the00:04:53
amount of real estate you own is00:04:55
directly related to your social status00:04:57
in society00:04:59
considering all this you can see why00:05:01
real estate prices have continued rising00:05:03
over time there's a high demand for real00:05:05
estate because of all these factors00:05:07
and coupled with incredible price rises00:05:10
in the past you can see why everyone and00:05:13
their mother wants to buy a home and00:05:15
surprisingly real estate in china i00:05:17
think on a per square foot basis is more00:05:19
expensive than what we get here in the00:05:21
united states so that's pretty00:05:22
interesting to me you can spend one or00:05:24
two million dollars in us dollars for a00:05:25
small condo or spend the same amount of00:05:27
money and buy a property like a whole00:05:29
single family property with a whole00:05:30
backyard and a lot for the same price so00:05:32
for them it's really worth it kind of00:05:33
reminds me of the 2008 u.s housing00:05:36
market where everyone wants to buy real00:05:38
estate because real estate prices are00:05:39
only going up00:05:41
the rush to buy houses was so huge that00:05:43
the developers were selling out00:05:45
complexes before even breaking ground00:05:48
for construction however even after00:05:50
construction finished apartments just00:05:52
sat there empty because they had owners00:05:54
but no habitants demand was high because00:05:57
everyone wants to buy their second or00:05:59
third home to get rich on the real00:06:01
estate boom so supply increased00:06:04
drastically to match the demand but a00:06:06
lot of these homes were just sitting00:06:08
empty as owners were only buying these00:06:10
homes in hopes of price appreciation00:06:12
because other asset sectors weren't as00:06:14
accessible and developed real estate was00:06:17
the only thing people invested in based00:06:19
on one data set chinese families had00:06:21
around 70 percent of their wealth in00:06:24
real estate yes you heard that right 7000:06:27
percent00:06:29
there are not much for diversification00:06:31
i'm not surprised but to be fair for the00:06:32
past 20 years or so chinese real estate00:06:34
was pretty good like i had a friend00:06:36
whose family bought a property for00:06:37
around seventy thousand dollars and now00:06:38
it's worth around two million dollars so00:06:40
for them it was a really good investment00:06:45
the collapse of chinese property giant00:06:47
evergrand and moulds shares in the00:06:49
highly indebted company have fallen 8000:06:52
this year and00:06:53
15 towers unfinished for seven years the00:06:57
developer that's an amazing shot though00:06:59
like i would be so happy to be the00:07:00
cameraman filming this and seeing all00:07:02
these towers just go down at once it's00:07:03
pretty awesome bankrupt these towers00:07:05
were recently brought down in shanghai00:07:08
after 20 years of stalled construction00:07:10
can you imagine having development for00:07:11
20 years that's pretty insane00:07:14
damn look at that00:07:17
evergrande took full advantage of this00:07:20
boom in china's real estate market and00:07:22
became one of the largest developers in00:07:24
the country00:07:25
at one point in 2018 they were actually00:07:28
the biggest real estate company in asia00:07:31
when people look at something that big00:07:33
well00:07:34
they kind of just assume it's all00:07:35
legitimate00:07:36
oftentimes though that's not really the00:07:39
case it's too big to fail i hope you00:07:41
guys learned that lesson after the 200800:07:43
crisis if anyone had looked under the00:07:45
hood they would have realized that some00:07:48
of the practices happening at evergrand00:07:50
were far from appropriate i feel like a00:07:52
lot of the larger developers have00:07:53
similar issues that evergren had where00:07:56
you know they just get too big and they00:07:57
don't have operations right supply chain00:07:59
starts to fail they have issues with00:08:00
their creditors they can't deliver their00:08:02
units on time et cetera et cetera now00:08:04
due to the sheer scale of the company a00:08:06
lot of practices were quite complicated00:08:08
but here's my attempt at trying to00:08:10
simplify this remember earlier how i00:08:13
mentioned that fomo into real estate was00:08:16
so bad the people were buying houses00:08:18
before construction even began00:08:21
usually a company like evergrand would00:08:23
lease a piece of land from the local00:08:24
government then they would turn around00:08:27
and sell the houses that are supposed to00:08:29
be built there and receive full payment00:08:31
for the houses before even breaking00:08:32
ground00:08:33
companies would never have any issue00:08:35
selling out as the demand for real00:08:36
estate was so high00:08:38
people were more than happy to take out00:08:40
mortgages and buy houses just in hopes00:08:42
of owning real estate someday in the00:08:45
future00:08:46
now00:08:47
the big problem that starts here is that00:08:49
companies like evergrand wouldn't00:08:52
usually use the money from the sale to00:08:54
start construction no instead they would00:08:56
use the money as down payment to buy00:08:59
even more land robbing peter to pay paul00:09:02
so they can sell even more apartments00:09:04
for the future now this is already a00:09:06
huge problem this should not have been00:09:08
allowed in the first place actually i00:09:10
think in the united states you can't00:09:11
even do that right in the u.s when you00:09:13
buy a new construction townhome or00:09:15
single family house usually you put a00:09:16
down payment or deposit and as a00:09:18
property is being constructed you kind00:09:20
of bought in at a certain price so00:09:22
you're contractually obliged to pay for00:09:24
that property at a certain price but you00:09:25
don't actually pay the full price and00:09:27
get a mortgage on it until the property00:09:28
is actually completed and you can't move00:09:30
in so this actually happened some of my00:09:31
friends were they're buying a new00:09:32
construction property and it would take00:09:34
six months or so to complete00:09:36
construction so they got locked in at a00:09:37
pretty good price over time the market00:09:39
did increase so you know they were still00:09:40
good but their mortgage hadn't closed00:09:42
yet right their mortgage was at a00:09:44
floating rate because you can't lock in00:09:45
and wait until you're actually going to00:09:46
buy the property so what happened was00:09:48
over the past few months interest rates00:09:49
have increased significantly so now00:09:50
their mortgage is at a way higher price00:09:52
than when they were initially quoted six00:09:54
months ago so it's either bite the00:09:55
bullet and buy the property at a lower00:09:57
price with a higher mortgage or just let00:09:59
everything go they'll say you know what00:10:00
i'm gonna cancel the contract you can00:10:01
have my small deposit and we'll just you00:10:03
know call even stevens but again for00:10:05
those companies you don't get paid until00:10:06
after the properties are actually00:10:07
completed whereas i guess in this case00:10:09
they get paid in full before the00:10:10
properties are even completed which is00:10:11
insane any unbiased person can look at00:10:14
the system and figure out that this00:10:16
isn't gonna last00:10:17
this is exactly the job of the ccp00:10:20
but they passed on this responsibility00:10:22
to the local governments00:10:24
and this is where another problem lies00:10:27
local governments were directly00:10:29
benefiting from these real estate00:10:30
pyramid schemes that companies like00:10:32
evergrand had going on00:10:34
you see in china one of the big ways00:10:37
local governments make money is by00:10:39
leasing land to developers so in china00:10:42
it's a little bit different you don't00:10:43
actually own the land china always owns00:10:45
the lands china can give you a 99 year00:10:47
lease so you can own the land as a00:10:49
tenant for 99 years and then every00:10:51
hundred years or so you can reapply to00:10:53
get the land again but i think the00:10:54
reason why they do it is that they00:10:55
always have control over the land so if00:10:57
they ever want to build like a new super00:10:58
highway or if you ever want to build a00:11:00
hospital they don't have to ask you for00:11:01
permission they just do it whereas like00:11:03
in the bay area there's a lot of people00:11:05
called nimby years right nimbui not in00:11:08
my backyard and these people say no i00:11:09
don't want this cal train or bar to go00:11:11
through my neighborhood and they prevent00:11:13
a lot of things from getting developed00:11:14
again versus china who just does things00:11:16
whenever they want to this is a prime00:11:17
example of perverse incentives we don't00:11:20
even need to get into the corruption00:11:22
that goes on around these land leases00:11:24
this was one of the main reasons why00:11:26
china's real estate bubble has gotten so00:11:27
big00:11:28
regulators were always slow to step in00:11:30
because it was directly benefiting them00:11:33
the ccp saw where things were heading00:11:35
and tried to get things under control by00:11:37
implementing the three red line policies00:11:39
for property developers00:11:41
but00:11:42
it was a little too late00:11:44
the debt burden continues to weigh on00:11:45
china's evergreen group as its angry00:11:47
suppliers are protesting the developers00:11:50
unpaid bills while its bondholders00:11:52
patience has dissipated so because they00:11:54
use the money from the sale of one00:11:55
property to buy more land they00:11:57
eventually will run out of money to pay00:11:59
for their suppliers and construction to00:12:01
complete each project the shady00:12:03
practices don't just stop there either00:12:05
evergrand would list these houses as00:12:07
assets under their balance sheet to get00:12:09
more loans from the banks so they can00:12:11
finish construction00:12:13
these houses were already sold to other00:12:15
people so no matter what accounting00:12:17
magic you use these can't be considered00:12:20
assets of evergrand because they're00:12:22
already paid in full so they have the00:12:24
cash in their balance sheet and the00:12:26
properties have already sold to someone00:12:27
else so it's using those properties00:12:29
they've already sold as part of their00:12:30
assets so they're kind of like double00:12:31
counting the numbers here the worst part00:12:33
is that evergrande wasn't the only one00:12:34
pulling these shady tricks almost every00:12:37
real estate company in china was00:12:39
operating this way00:12:41
the whole sector was over leveraged to00:12:43
the teeth just like a ponzi scheme the00:12:45
only way to continue forever is if you00:12:47
continue growing forever but you can't00:12:50
keep growing if people lose trust in00:12:52
evergren's ability to stay solvent00:12:54
and i'm sure you guessed it by now00:12:56
that's exactly what happened00:12:58
once the company misses one payment00:13:01
chaos ensues00:13:04
early last year one of evergrand's00:13:06
subsidiary companies failed to make a00:13:08
payment on its loans and people started00:13:11
looking deeper into its financials this00:13:13
was a huge issue last year honestly i00:13:15
never even heard of the company00:13:16
evergrand until these issues happened00:13:18
last year and then it was all over the00:13:20
news this is when the house of cards00:13:22
started crumbling and the news about00:13:24
contagions spread across the world the00:13:27
debt burden continues to weigh on00:13:28
china's evergreen group a china's top00:13:30
real estate developer evergrand is00:13:32
reeling under a financial crunch i guess00:13:35
another thing that i didn't realize here00:13:36
is that because they're buying their00:13:38
properties in full from day one before00:13:40
the properties are even completed that00:13:41
means they're paying a mortgage on a00:13:43
property that doesn't even exist that's00:13:44
why they don't want to pay their00:13:45
mortgage anymore it's pretty insane00:13:47
while in china the debt crisis at00:13:49
evergrand is only snowballing and00:13:51
there's so many questions surrounding00:13:53
evergreen in a notice circulating on00:13:55
social media the suppliers have demanded00:13:57
payment from evergrand evergreen00:13:58
evergreen evergreen evergrown and00:14:00
because evergreen is like a huge part of00:14:03
china's economy when that thing goes00:14:04
down it will affect the rest of china's00:14:06
economy these investors were loaded with00:14:09
various promises00:14:11
to demand the developer to give them00:14:12
their money back00:14:13
the protest made authorities nervous00:14:15
when the news got out that evergrant00:14:17
could default on 300 billion dollars00:14:20
worth of loans00:14:21
panic spread throughout the economy00:14:24
people also realize that this problem00:14:26
isn't limited to evergrand00:14:28
the whole real estate sector is over00:14:31
leveraged and it's starting to crumble00:14:33
chinese developers owed around 5.300:14:36
trillion dollars in debt00:14:38
when the ccp realized just how big the00:14:41
problem was00:14:42
they decided to step in and soften the00:14:44
blow back in 202100:14:46
ever since then evergrande and other00:14:48
real estate developers have been00:14:49
chugging along slowly with the help of00:14:52
the ccp construction of buildings sold00:14:54
in 2019 are still not done00:14:57
all the funds from new sales are00:14:59
basically going towards paying off00:15:00
companies liabilities instead of00:15:02
actually finishing up projects00:15:04
this is just one example of unfinished00:15:06
projects that had to be demolished00:15:08
because of problems from the delay in00:15:10
construction so what happens to all the00:15:12
money for all those units that were00:15:13
already bought for did people just not00:15:16
get their units anymore i have no idea00:15:17
what's going on here whenever owners of00:15:18
these houses would ask about00:15:20
construction delays they were just met00:15:22
with excuse after excuse00:15:25
slowly things just got to be too much00:15:28
some of these citizens had their whole00:15:29
life savings invested in these00:15:32
unfinished projects00:15:34
and they just couldn't take it anymore00:15:35
that's wild so on july 1st all of the00:15:38
home buyers from a project in central00:15:40
china so this is why when you buy real00:15:42
estate you need to make sure that00:15:43
numbers make sense from day one00:15:44
personally i don't like buying00:15:46
speculative real estate like you know00:15:47
buying a property and expecting it to00:15:49
just magically appreciate in value and00:15:50
then sell it then we buy cash flowing00:15:52
rental properties so when we buy them00:15:54
they're ready rent ready or it needs a00:15:55
minor rehab that we can take care of we00:15:57
put a tenant inside and the tenant's00:15:59
rent can cover all of our expenses like00:16:01
the mortgage the insurance the taxes and00:16:03
we're not positive so these things don't00:16:05
happen to us saying that they would stop00:16:07
paying their mortgage payments to the00:16:08
bank unless the construction restarts00:16:11
now a project usually includes thousands00:16:14
of houses and are worth upwards of00:16:16
hundreds of millions of dollars00:16:18
but at the end of the day it was just00:16:20
one project in a nation of 1.6 billion00:16:23
people so it wasn't that big of a deal00:16:26
but it didn't stop at just that one00:16:29
project00:16:30
by the same evening home buyers from00:16:32
another such project had announced the00:16:34
same mortgage boycott00:16:36
and the movement started to spread00:16:38
across the nation00:16:40
by july 12th00:16:41
100 projects had joined the boycott00:16:44
and as of the writing of this script00:16:46
over 300 projects across china are00:16:50
boycotting mortgage payments until00:16:52
construction resumes00:16:54
tens of thousands of people have00:16:56
willingly defaulted on their mortgages00:16:58
in hopes of getting the government's00:16:59
attention00:17:00
people have also taken to the street to00:17:02
protest these construction delays00:17:12
currently these 300 projects represent00:17:15
more than a hundred billion dollars of00:17:17
debt i feel bad for the banks though00:17:18
because they did the mortgage but00:17:20
they're not the ones who are delaying00:17:22
the projects right it's the developers00:17:24
who are the ones who aren't doing their00:17:25
job that china's big banks are holding00:17:28
when you factor in that some major00:17:29
developers also defaulted last year on00:17:32
their debt00:17:33
this is not a good sign for china's00:17:35
banking institutions00:17:37
what's even more concerning for banks00:17:39
and the government is not just 10000:17:41
billion dollars in possible default but00:17:44
the growing number of people who are00:17:45
joining in on the boycott the ccp has00:17:48
already ordered banks and news00:17:50
organizations to stop publishing reports00:17:53
about mortgage boycotts party officials00:17:56
are doing everything they can to kill00:17:58
this news00:17:59
these boycotts represent an existential00:18:01
crisis for chinese banks a crisis that00:18:04
has a potential to be a hundred times00:18:06
worse than what american banks faced in00:18:07
2008. see it's a lot harder to censor00:18:09
news nowadays because everyone has their00:18:11
own like wechat groups if some person in00:18:13
one part of china says something they00:18:15
can easily transmit that information to00:18:16
their family members or friends across00:18:17
the other side of the country because00:18:19
before all you have to do is block the00:18:20
major tv networks and newspaper articles00:18:22
one of the big differences between 200800:18:24
and the current situation in china is00:18:26
that the majority of these loans are00:18:28
collateralized by houses that are not00:18:31
yet built00:18:32
so banks can't just repossess the house00:18:34
when someone defaults and cuts their00:18:36
losses so the banks have to become00:18:37
enemies with developers as well i don't00:18:39
know how they're gonna do it banks are00:18:40
being forced to eat these losses and if00:18:43
the defaults keep growing there's a00:18:45
chance that big banks might fold one of00:18:48
the big four state banks in china has00:18:50
already limited people's withdrawals00:18:53
i'm sure most of you already know how00:18:54
the modern banking system works but00:18:57
here's a quick overview for everyone00:18:58
else00:18:59
banks usually loan the money the00:19:01
depositors deposit and hope to earn00:19:03
interest on it to make a profit00:19:05
usually the reserve requirement is set00:19:07
by the central banks let's say that it's00:19:10
ten percent that means that whenever00:19:11
banks get a hundred dollars in deposits00:19:13
they are only required to keep ten00:19:15
dollars in the vault and they can loan00:19:16
out ninety dollars and charge interest00:19:18
on it so this is just a very simplified00:19:22
example but these types of transactions00:19:24
happen millions of times over and over00:19:26
again in an economy and that's basically00:19:29
how the modern banking system works to00:19:31
add another layer to that most banks who00:19:33
originate loans then sell those loans to00:19:35
another party to get their money back00:19:36
and then these are made to cycle over00:19:38
and over and over again and they00:19:39
continue making more loans and making00:19:41
more money et cetera et cetera for every00:19:43
100 in deposits banks are able to create00:19:46
about a thousand dollars of money in00:19:48
circulation00:19:49
now this system is pretty great in the00:19:52
past century a lot of economic growth is00:19:54
in part thanks to this fractional00:19:56
reserve banking but the only way this00:19:58
system works is if depositors have trust00:20:00
in the bank's ability to keep their00:20:02
money safe to prevent runs from the bank00:20:04
the fdic started insuring bank accounts00:20:07
up to 250 000 so if you have money in a00:20:09
major bank like chase or wells fargo and00:20:11
for some reason those companies happen00:20:12
to go under and no bank buys them out00:20:14
your money up to 250k is technically00:20:17
insured and the federal government will00:20:18
pay you back eventually now if too many00:20:20
of these loans that banks are giving out00:20:22
become worthless then that trust starts00:20:25
to00:20:26
erode00:20:27
this is why the usa enacted strict00:20:30
lending regulations after the 200800:20:32
crisis so banks are careful with who00:20:34
they lend to00:20:36
now as more and more home buyers are00:20:38
defaulting on their loans chinese banks00:20:40
are also at risk of losing the trust of00:20:42
the depositors putting limits on the00:20:44
withdrawals definitely does not help00:20:46
with building that trust00:20:48
if too many people start pulling out00:20:50
their deposits from the banks then a00:20:52
bank run happens and banks collapse00:20:55
because of it00:20:57
this is where the big headache lies for00:20:58
the ccp the chinese economy is heavily00:21:02
reliant on its financial sector and the00:21:05
real estate sector00:21:06
real estate represents around 30 percent00:21:09
of china's gdp while seven out of the00:21:11
top 10 companies in china are financial00:21:14
institutions00:21:15
this is why as the news about these00:21:17
boycotts spread the ccp held an00:21:20
emergency meeting with the banks to00:21:21
discuss the rising risk of these00:21:23
defaults00:21:24
to help the struggling developers the00:21:26
ccp is considering injecting more than a00:21:29
trillion dollars into real estate00:21:31
companies so that they can finish off00:21:33
construction with these projects00:21:35
remember last year when the evergrand00:21:37
news came out the ccp was strictly00:21:39
against bailing out failing companies as00:21:42
they didn't want to promote risky00:21:43
business behavior in china00:21:45
but now that they're realizing that this00:21:47
has the potential to tank the government00:21:50
ccp officials are changing their tone00:21:52
when it comes to bailouts too big to00:21:54
fail the ccp has also stepped up the00:21:57
censoring around this topic which is00:21:58
pretty funny right like if you're a poor00:22:00
person and you somehow default on credit00:22:03
cards your car payments yeah they don't00:22:04
care they'll take away your house take00:22:06
away your car and they'll ruin your00:22:07
credit score and you're left in the dirt00:22:09
but if you are a big conglomerate you00:22:11
make a lot of money you have a lot of00:22:12
jobs you're a huge part of the economy00:22:14
they will do everything in their power00:22:16
to make sure that you're taken care of00:22:17
will give you money to make sure you are00:22:19
successful it must be nice so that was a00:22:20
lot of great information and i was00:22:22
surprised to see all this going on00:22:24
honestly i think the biggest issue was00:22:25
that they allowed the sale of properties00:22:28
at full price before the properties were00:22:29
complete with construction that is not00:22:31
how we do it here in the united states00:22:32
as far as i know you're only allowed to00:22:33
buy the property in full and get a00:22:35
mortgage on it after the property is00:22:36
completed and it's move-in ready so this00:22:38
way your developers aren't able to just00:22:40
take that money and use it on other00:22:41
projects instead it deposits more of a00:22:43
security blanket so developers know that00:22:45
these units are already spoken for and00:22:46
they don't have to worry about marketing00:22:47
too hard so it looks like china's in a00:22:48
really big mess i'm surprised to see how00:22:50
everything shakes out and how china's00:22:52
problems will cause issues here in the00:22:53
united states i'm curious to hear your00:22:55
guys thoughts on what's gonna happen in00:22:56
the future and if you're curious to see00:22:57
how the bay area real estate market is00:22:59
going check out this video over here00:23:00
where i go over all the details and00:23:02
statistics thanks for watching guys i00:23:03
really appreciate it i'll see you next00:23:04
time take careDescription:
Attend our FREE "How to buy your first rental property masterclass" here: https://www.goodsweethomes.com/masterclass/ The Chinese economy is collapsing, and the reason may surprise you. In this video, we'll react to the reason behind China's economic decline, and what it could mean for the future of the global economy. Original Video by Business Basics: China's Mortgage Crisis, Banks are Failing, Protests Everywhere. China's financial crisis is Here https://www.youtube.com/watch?v=YBBnQmRcRI4 -- ✅ ✅ Learn How To Buy Your First Out-Of-State Investment Property with our course Remote Rental Riches! https://courses.digitalnomadquest.com/p/remote-rental-riches/?product_id=2792730&coupon_code=SEANEARLYRRR If you're looking for a hard money loan, apply at https://www.cvlending.com/ and mention that you came from Sean's channel to get $500 off of your processing fees! Want my property analysis calculator? Get it here: https://courses.digitalnomadquest.com/p/property-analysis-calculator/?product_id=2808384&coupon_code=LINK50 Subscribe to the Channel! ► https://www.youtube.com/channel/UCxTnM9iMhQnTLUvGcwsgaEQ?view_as=subscriber%3Fsub_confirmation%3D1 Listen to the Podcast! ► https://podcasts.apple.com/us/podcast/we-love-real-estate-podcast-with-sean-pan/id1437898064 Visit our Website! ► https://everythingrei.com/ Join our Meetup! ► https://meetup.com/everythingrei/ Follow on Instagram! ► https://www.facebook.com/unsupportedbrowser 00:00 Introduction 00:23 1989 History 03:42 100x Worse 08:49 What Evergrande Does? 14:45 In 2021 16:40 Boycott 18:53 How Modern Banking System Works 21:54 Conclusion
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