As the “loan suspension” storm caused by unfinished buildings in China’s real estate industry continued to expand, on August 23, four mainland real estate directors or former executives have been investigated by CCP authorities. The companies are: China Resources Land, a central enterprise under China Resources Group, Xiamen C&D Group, the largest state-owned enterprise in Xiamen. And Shenzhen Talent Housing Group, Shenzhen’s largest public housing company. It is rare for four real estate giants to be investigated on the same day.
As reported by National Business Daily, the four real estate giants are suspected of serious violations of discipline and law. They are Tang Yong, former secretary of the Party Committee, chairman of the Board and CEO of China Resources Land; Zhuang Yuekai, chairman of C&D Real Estate; Shi Zhen, president of C&D Urban Services; and Liu Hui, deputy general manager of Shenzhen Talents Housing Group.
Recently, the Evergrande crisis and unfinished construction storm broke out in China’s real estate industry, causing “loan suspensions” and mortgage payment refusals, for a total of 326 such projects.
The Chinese New York Times reported on August 18 that homeowners’ mortgage payment suspensions is one of the manifestations of China’s economic slowdown. According to estimates by the ANZ Research Center (Australia and New Zealand Banking Corporation), collective mortgage suspensions account for about 4% of the total outstanding loans.
Michael Pettis, a finance professor at Peking University, said that there’s a bigger problem behind the refusals to make mortgage payments, which is China’s property bubble is set to burst and it has been growing for decades. The underlying problem is that houses are overvalued.
The storm of unfinished buildings has led to a wave of loan suspensions, making China’s real estate industry even worse in the coming cold winter months. Xi Jinping also needs a little trick, “Economic stability” should be his political slogan as he wants to win a third term as leader of the Communist Party, according to Vision Times.
Now, the CCP has not only hunted down the assets of Evergrande Group executives, but it has begun a massive anti-corruption campaign. China Resources Land, Xiamen C&D Group, Shenzhen Talent Housing Group, and other state-owned enterprises were investigated within a day. The Xi administration has made major moves against the four real estate giants, which has certainly had a chilling effect, Vision Times reported.