(Coming…)
Property Loans Halted in China’s 2nd and 3rd-Tier Cities; Is China’s Spectacular Real Estate Bubble About to Pop?
Posted: 24 Jul 2011 10:02
China Daily reports Property loans halted in 2nd and 3rd-tier cities
Commercial banks are halting individual property loans in the face of tightening monetary policy … “We will not accept property loan applications at present, even if it is from a first-time home buyer,” a bank staff in Chongqing told the paper. …
… Residential and commercial property development have been such a big component of growth in recent years that anything that damages the property market risks upsetting the entire apple cart. Nobody can forecast with any certainty when the crash will come, but come it will. …
And when it comes, its knock on consequences are going to be extreme, possibly just as seismic as the rolling series of banking crises we’ve had here in the west. As noted in the IMF’s latest staff report on China, published this week, the property sector occupies a central position in the Chinese economy …
(And) lending to real estate … makes up around 18pc of all bank credit …. And for local authorities, which account for 82pc of public spending in China, property related revenues are an important constituent of the overall revenues ….
As with the US, the property bubble will take China’s massive credit bubble and banking system with it. … China’s implosion looks to be massive. Few are prepared …
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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