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China Rejects $1 Trillion Housing Rescue Plan Pitched by IMF (www.bloomberg.com)

submitted 3 months ago by filoria@lemmy.ml to c/worldnews@lemmy.ml

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[-] andyburke@fedia.io 8 points 3 months ago

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.

[-] queermunist@lemmy.ml 7 points 3 months ago* (last edited 3 months ago)

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.

[-] Num10ck@lemmy.world 4 points 3 months ago

it was basically the only kind of investment allowed in china.

[-] sunzu@kbin.run 0 points 3 months ago

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

[-] andyburke@fedia.io 1 points 3 months ago

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?

[-] sunzu@kbin.run 0 points 3 months ago

Real estate is an asset class just like any other asset that is traded.

With respect to them giving money unfront for building, they got scammed. It is a criminal matter. But why should other people socialize their bad choices.

Bail out mechinsm done in the west is the most retarded way to deal with these issues and it creates incentives for owner class to scam taxpayers.