China Rejects $1 Trillion Housing Rescue Package Proposed by IMF
www.bloomberg.com
Chinese authorities have rejected a proposal made by the International Monetary Fund to use central government funds to complete unfinished housing, dealing a blow to hopes for more forceful support to an industry that’s been a major drag on the economy.
    • carl_marks[use name]
      22•9 months ago

      The quick answer is because the housing market was used for speculation and was causing real estate prices and rents to rise. China introduced “three red lines” policy to mitigate this and let the housing market crash and let the billionaire CEO Hui Ka Yan (and mostly foreign Investors) hold the bag

      • HobbitFoot English
        8•9 months ago

        There were other positive feedback items happening as well, including local governments relying on development as the major tax base.

        China is also likely to see a drop in infrastructure investment in the next generation, so having some of these companies collapse isn’t seen as a major issue in China.

    • davel [he/him]English
      16•9 months ago

      Because housing is for living in, not for speculation or asset price inflation*.

      .
      *Radhika Desai and Michael Hudson Discuss the Causes and Politicization of Inflation

      What has really been inflated, since 2008, has not been consumer prices, but asset prices — [that is,] real estate prices, stocks and bond prices, things that the 1% hold. Wealth has been inflated much more than goods and services. [This is especially true] for real estate.

      This debt has been inflated not by government debt, not by government deficits, but by the Federal Reserve creating a $9 trillion subsidy to the banks to support real estate prices, and hence the value of bank-held mortgages and stock and bond prices.

      This is not discussed, or even recognized, in the mainstream economic models. Instead, we have a kind of mythology by right-wing anti-labor financial lobbyists.

      This mythology is about what I think most of the listeners are expecting us to discuss: the inflation of rising consumer prices. That’s the only kind of inflation that the Federal Reserve talks about. This is all blamed on increasing the money supply, as if somehow money is creating the inflation.

      They are not talking about inflation as the result of monopoly pricing. They are not talking about inflation as a result of NATO’s sanctions against Russia. They are just talking about money [as if] somehow, if we [could] just stop money supply, if we could stop the government spending so much money on Social Security and Medicare, and other social spending (not military spending) then everything would be over.

      We’re actually going to be talking about the relationship between, [on the one hand,] the inflation of housing and asset prices [and,] on the other hand, how this actually affects the inflation of consumer prices, and how debt and inflation all go together.