[The Epoch Times, February 24, 2023](Epoch Times reporters Xia Song and Li Yun interviewed and reported) According to the website of the Ministry of Housing and Urban-Rural Development of the Communist Party of China (MOHURD), on February 15, the State Council Information Office held a press conference, Introduce the work of the first national comprehensive risk survey of natural disasters. Qu Qi, director of the Engineering Quality and Safety Supervision Department of the Communist Party of China, said that through the census, for the first time, the “properties” of housing construction and municipal facilities have been fully understood.
According to Zheng Guoguang, Director of the Leading Group Office of the First National Natural Disaster Comprehensive Risk Survey of the State Council of the Communist Party of China, the housing and urban-rural construction industry has obtained data on nearly 600 million urban and rural (urban and rural) housing buildings and more than 800,000 municipal facilities across the country.
One stone caused a thousand waves, and the 600 million houses immediately caused an uproar in public opinion. According to the analysis, there is one house for two people, and the vacancy rate is quite high. Local finances are tied to real estate, and the CCP cannot solve this problem. The real estate market may further deteriorate and hit the Chinese economy hard.
Why are there so many houses so high?super currency
Taiwanese economist Huang Shicong told The Epoch Times on February 23 that the CCP’s official announcement of 600 million houses surprised the outside world. There is almost one house for two people. The vacancy rate is quite high. Obviously, the oversupply of houses is a big problem.
He said: “In the past, China’s economic growth has been heavily stimulated, which has a lot to do with real estate. From the central government to the local government, real estate has been continuously encouraged. Real estate has driven infrastructure construction, employment, and the entire local finance. So they continue to use real estate to stimulate the economy. But one day they will have to pay back, overdrafting the economy of the future people in exchange for the current economic growth, this will become a situation of excess housing.”
With so many houses, why are housing prices so high in China?
Huang Shicong said: “First, the Chinese people have no place to invest, and it is not convenient to invest in the stock market. There is foreign exchange management, so there is no way to invest overseas. The first choice for investment is real estate. Second, China’s capital is quite large. The so-called M2 is currency. The ratio to GDP is more than twice that of any other country, which means that China (the CCP) has issued a very large amount of currency. So much money, of course, will flow to real estate, and real estate prices will also hold up.”
The problem that the CCP cannot solve: Local finances are tied to real estate
Huang Shicong said that China’s economic structure formed in the past 20 to 30 years cannot continue now. There are too many houses, and the housing prices are too high to support them. Local finances are tied to real estate, how to untie this difficult knot? In case the entire real estate really falls, it will be a loss for the whole people. “
He said: “This is a big problem that is very headache and difficult to solve in China now.”
He believes that when Xi Jinping said that “houses are for living in, not for speculation”, he obviously hopes to curb the sharp rise in housing prices or the situation of real estate speculation. The CCP’s announcement of this data is intended to cool down the real estate industry, but it cannot take too severe measures.
“Use this data to let the public know that there are too many surplus houses (vacant houses), and you can buy them for self-occupation. You should be careful when investing. Let everyone know the seriousness of the problem, and then use time to slowly resolve the excess problem.”
Huang Shicong said: “It’s time to face this problem. I’ve been avoiding it, and the bubble is getting bigger and bigger. China (the CCP) should take relevant measures, but it won’t burst the bubble. I just don’t want the bubble to get bigger. big.”
He said that so far, the CCP has no way to solve it, and this may really be a headache for the CCP’s top leaders. “China’s housing prices have gone back by 10% to 20%. It must be an unbearable pain. The property of the whole people is locked up. The national finance or local finance will definitely be dragged in.”
Real estate market further deteriorates, impacting China’s economy
Qin Peng, a political and economic commentator in the United States, told The Epoch Times that the Ministry of Housing and Urban-Rural Development said that there are 600 million houses, and there are 310,000 municipal roads, 120,000 municipal bridges, etc. excess.
He said: “This surplus is in a sense caused by the uneven distribution of resources. Who owns most of the houses? In addition to the investment of some wealthy people, there are also houses that were corrupted and robbed by corrupt officials. Of course, there are also some houses that developers are building, and this part should be relatively small.”
Qin Peng said that in order to promote economic GDP and engage in the real estate economy, the CCP encourages people to buy houses in various ways. Many people regard houses as investment products and financial products, not for living. Moreover, in order to maintain land finance, local governments continue to sell land, and then invest the recovered money in infrastructure. Officials can still make money and increase wages. The result is that a large number of houses are vacant.
He believes that the CCP’s census, in addition to the official reason, also has another purpose, which is to collect real estate taxes. In this case, housing prices in China may plummet.
In addition, after the CCP broke the news of 600 million houses, it caused a sensation. Judging from the online response, what everyone thinks of is not the results of the natural disaster risk survey, but the housing surplus. Therefore, as a result, a large number of people may no longer invest in houses, and the real estate market may further deteriorate.
Qin Peng said: “The number of real estate sales last year has dropped by more than 40% compared with 2021, and it may fall even worse in the future. This will further destroy the CCP’s land finance, and the fiscal revenue and expenditure of local governments will worsen, which will have a negative impact on the entire country. The Chinese economy has had a huge impact.”
Why does the Chinese Communist government allow massive housing construction?
Li Hengqing, an economist based in the United States, told The Epoch Times today (February 23) that 600 million houses is indeed quite astonishing. There are a large number of houses that cannot be sold in the second, third, fourth, and fifth tier cities. “Ghost towns” have appeared in many places in Jiangsu and Zhejiang. The typical one is Ordos in Inner Mongolia.
Why did the local government and the central government allow real estate developers to build so many ghost towns? This is a very important question.
He said: “To build a house requires land acquisition, and the local government can get a lot of tax and land transfer compensation in the process of land transfer to complete financial revenue. Real estate developers can get it from the bank in the process of buying land and building a house. Loans.” The government, developers and banks are all beneficiaries of rising real estate prices.
Real estate business collapse is only a matter of time
Li Hengqing said that the CCP government has been driving up housing prices from the central government to local governments, and everyone hopes to make money by buying a house. However, money in the real estate industry has been exploited layer by layer. After 2019, real estate began to explode, resulting in a large number of unfinished houses.
He said: “Coupled with over-development of real estate, there are too many houses to sell, and house prices will inevitably fall.”
Li Hengqing analyzed that, first of all, ordinary people’s consumption income has decreased. Secondly, ordinary people have no expectations for the future, the price of houses will be reduced, there may be no jobs in the future, and the economy has been bad, so how can it be possible to buy a house? Also, if you need a loan to buy a house, you have to be a house slave. Although the CCP has come up with various methods to trick ordinary people into buying houses, many people are not fooled at all. Not only do they not buy houses, but they also repay their loans in advance to reduce the cost of living for families.
He said: “Now the entire real estate market is on the verge of collapse. Everyone is afraid that this gray rhino will collapse completely. But the real estate crash is inevitable, and it is only a matter of time. For the Chinese economy, this will definitely make things worse.”
Responsible editor: Gao Jing#