China Cuts Off Housing Bubble Commie Style
In addressing a percieved housing bubble on mainland China, the authorities have responded in typical authoritarian means. "China ended the favorable interest rates for private housing loans Thursday..At the same time, the minimum down payment in cities with rapid housing price increases was raised from 20 to 30 percent."
It seems "citizens" were using the banks to speculate in the rising house market, creating too much risk in bank portfolios. "By the end of February 2005, outstanding commercial housing loans exceeded 1.65 trillion yuan ( US$200 billion), accounting for 23 percent of the commercial banks' medium and long-term loans."
Even if the translation is elementary, the Chinese seem to be more straight forward than US central bankers. "If the housing bubble burst and the borrower could not make the repayment, the commercial banks will be faced with a large amount of bad debts." English.Eastday.com
2 Comments:
ben,
careful with the language "typical authoritarian means". as in so many instances with china, if we implemented the same policy here the description would not apply.
btw, many of the large scale state policies coming out of china today are far more progressive than what we have here. for instance, they recognize the seriousness of uban pollution and are implementing clean energy policies that are far in advance of any government thinking in the good ole u.s.a.
-e
e,
what i meant was that the chinese state just does what it chooses to do, with no debate, etc.
it is not hard to find countries with more sensible policies than the u.s...thanks for stopping by!..ben
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