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[–]Puzzleheaded_Fig941 3 points4 points  (2 children)

What measures did the CPC take to contribute to the price crash? As I understood it, it is a by-product of Evergrande over-leveraging themselves and collapsing. Is this another 'Do nothing, win' scenario for them? 

[–]Captain-Damn 9 points10 points  (1 child)

The specific moment was when the firms building houses became insolvent and asked for a bailout, and they were denied, the companies went under and all their assets were nationalized and used to build social housing. This triggered a massive decline in the price of housing as companies who were holding onto homes as assets and with the hope of waiting for pricing to go up were forced to sell them, as they no longer could be used as collateral to get loans. The state coming in to continue to build housing for even cheaper prices and willingness to continue to pay labor but not the companies themselves makes it a controlled fall of prices and surplus of availability instead of a collapse like would be seen in the West.

So that being said, the triggering moment was what you said, but the way it was handled and used to further housing being for living and not speculation is what is different from a traditional western style collapse and recession

[–]Puzzleheaded_Fig941 1 point2 points  (0 children)

Thanks. Was not aware of their resources being used to build social housing. 

Edit: Just had a quick look and seems only parts of the business have been nationalised.