In 1989 (Tiananmen Square protests), when China’s democracy protests were threatening the rule of the Chinese communist party, the CCP launched an attack against its own citizens. This step was quite shocking for the whole world because as a result of this attack, thousands of innocent citizens of china lost their lives, while thousands got wounded.According to independent reports approximately 10000 people lost their lives.
Well, the current situation in China is not so different.
Currently, CCP is under immense pressure as communist economic and financial system is crumbling very fast for the first time in last 75 years, protests have broken out in multiple cities, and the crusade seems to be gaining more and more momentum. Although CCP is claiming that the current situation is more political than a banking crisis, but in reality, the banks are at the risk of losing over 9 trillion dollars. However, the biggest threat to the fragile economy of China is the mortgage situation. Since the real estate sector of China accounts for 24% of GDP, and it involves the most important industries, including banking and real estate. 20 of total chinese cities has officially become ghost cities.
Experts are of the view that the mortgage crisis in China will be a hundred times worse than the crises of 2008.
Think tank Oxford Economics said in a recent note.
“Mortgage boycotts, driven by deteriorating sentiment toward property, are… a very serious threat to the financial position of the sector,”
Owning a home is the dream of every person in the world, but in China, it is considered as an important cultural significance. Chinese use real estate as a way to plan their retirement, guys with real estate are considered as an attractive choice for marriage, and it is directly associated with their social status.
Back in 2008, everybody in Europe and America wanted to buy a home, the prices were incredibly increasing, and demand was so huge that big complexes were sold out even before breaking ground for construction. The demand for buying was so high that ever wanted to own their second or third home in the hopes of price appreciation and getting rich, But there was no habitant demand. Now, history is repeating itself in China. In a recent report, around 20% of urban housing properties in China, which accounts for around 65 million properties, are vacant and often called “ghost cities”.
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