More on Chinese RE -
Excerpts from article in previous post:
“The real estate fund, if confirmed, is a stronger initiative compared to previously guiding state banks to lend to property developers, but it won’t be enough to solve the problem unless it can be capitalized by a blank check from the Chinese government,” she said
Goldman last year calculated that the Chinese property market is the world's biggest asset; needless to say, a crash here would lead to an unprecedented global deflationary shockwave.
Of course, as Jim Chanos was quick to point, the current iteration of the rescue fund is a drop in the bucket..
This $12B “rescue” fund should be seen in proper context. Residential RE is an annual $3T spend in China
and as Bloomberg notes, the 12 developers expected to benefit from the fund rescue have a combined short-term debt of 742 billion yuan, UBS analysts calculated. The number would swell to 4.05 trillion yuan when taking into account the amount owed to homebuyers and suppliers, they added..
