China Finance Online (NASDAQ: JRJC) recently reported that, with the destructive pandemic and a very weak reopening and economic come-back, average Chinese are seeing significantly reduced income. According to publicly released foreclosure data, in the first five months of this year, Chinese foreclosures rose to 1.15 million instances, compared to 9,000 in 2017, 20,000 in 2018 and 500,000 in 2019. Based on the numbers from one branch of one bank in Shenzhen, which was previously a heated housing market and a high-income city, just in May, over 13,000 accounts abandoned their payment plan and stopped their mortgage payments. Analysts said that most of the Chinese real estate is for investment and the typical investment cycle is five years. This means massive foreclosures have still not yet been triggered. The real economy in major Chinese cities like Shenzhen, Guangzhou, Wuhan, and Fuzhou is seeing a freefall, which will result in a wave of unemployment that only adds to a worrisome future outlook.
Source: China Finance Online, June 1, 2020