Chinascope – Page 155

Many Chinese Home Buyers Collectively Decide to Stop Paying Their Mortgage on an Unfinished Home

The Chinese real estate industry has faced several ripple effects after many developers struggled or defaulted on their debt payments. Not only do investors and banks face losses, but constructions of many buildings have also been halted for months if not years and home buyers were not sure when they will eventually receive their homes. For some buildings, the builders have no intention to complete the construction and will just leave them in the unfinished status forever; the Chinese call them the “rotten-tail buildings.”

Unlike the U.S. the home-selling practice where the home buyers sign a contract with the builder when the building is constructed and take out a mortgage when the home is delivered, Chinese buyers take out the mortgage at the time of signing the contract and start the payment right away, even though they don’t have the house.

This presents a big, unfair problems for the home buyers. They are paying mortgages to banks while seeing no progress in the construction of their homes.

Getting no help on these unfinished buildings from the builders, the banks, and the government, many home buyers resolved to a new approach: collectively announcing they would stop their mortgage payment.

On June 30, all home buyers of an unfinished construction project in Jingdezhen City, Jiangxi Province announced jointly on social media that they would stop mortgage payments until the builder resumes construction. This started a wave of home buyers’ stopping their mortgage payments. By June 16, according to NTDTV’s report, home buyers of at least 270 project (a project may consist of multiple buildings) throughout China, including Jiangxi, Anhui, Henan, Hubei, and other provinces, have made similar announcements,

Technically, the unfinished building is a dispute between the home buyers and the real estate developers, not involving the bank. Banks can still hold the buyers accountable for their payments and have the option to freeze and auction buyers’ own personal properties and put them on a bad credit list, if they stop their payment. However, since home purchasing accounts for a significant portion of spending for many Chinese families, these home buyers feel that they have nothing more to lose.

Some home buyers have also found ways to accuse the banks. Some banks didn’t put their payment in proper escrow accounts, some banks released the funds to real estate developers though the construction didn’t reach the required funding stage, and some banks purposely created bad mortgage contracts to steal the home buyers’ money.

This stopping payment wave also spread to real estate developers’ suppliers and contractors. On July 15, an announcement circulated on the Internet that suppliers and contractors in Hubei Province supporting the Evergrande Group decided to stop providing funding and materials and stop doing work if they do not receive Evergrande’s payment up front.

Sources:
1. SINA, July 13, 2022
https://finance.sina.com.cn/chanjing/cyxw/2022-07-13/doc-imizmscv1383585.shtml
2. Epoch Times, July 14, 2022
https://www.epochtimes.com/gb/22/7/14/n13781035.htm
3. NTDTV, July 16, 2022
https://www.ntdtv.com/gb/2in022/07/16/a103480739.html

Briefings | | July 18, 2022 | @CS Economy/Resources

China’s Second Quarter Economic Growth Slowed Sharply

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, the newly released official numbers showed Chinese GDP growth slowed to 0.4 percent in Q2. The economy grew at its slowest pace since it was first hit by the coronavirus outbreak two years ago, underscoring the impact on growth of the country’s strict measures to contain the pandemic. The GDP number is far below the 1.2 percent that economists had forecast. That means Beijing is likely to fall well short of its full-year growth target of around 5.5 percent. This will deliver another blow to a global economy battered by recession fears. However, China remains committed to its “dynamic zeroing” approach to eradicating COVID infections. With recent cases of the highly contagious BA.5 COVID variant in some cities, it appears more lock-downs are likely. To make matters worse, data has also shown no signs of improvement in the slump in investment in China’s real estate market, which has driven demand for goods and services that account for about 20 percent of China’s total GDP. It was reported very recently that households in dozens of cities have stopped paying their mortgages as property developers have failed to complete planned construction. The Chinese National Bureau of Statistics said, “The foundation for a sustained economic recovery is not solid.” Also, the Bureau warned of a “rising risk of stagflation” in the world economy. The Chinese stock market reacted flat to the GDP data. In the meantime, the heavy blow of Shanghai’s lockdown is also clearly seen in the data. The city’s economy contracted 13.7 percent year-over-year in the second quarter.

Source: NetEase, July 16, 2022
https://www.163.com/dy/article/HCAR8MPG0553GU6W.html

Briefings | | July 18, 2022 | Economy/Resources

Australian PM Will Ignore China’s Four-Point Demand to Restore China-Australia Relations

Taiwanese news site NewTalk recently reported that the Chinese Foreign Minister, Wang Yi, met with Australian Foreign Minister Penny Wong on the sidelines of the G20 Foreign Ministers’ Meeting in Bali, Indonesia. Wang Yi urged Australia to comply with a list of four actions to bring bilateral relations back on track. Australia’s new prime minister Anthony Albanese said he will “ignore” China’s demands. China asked for these four changes on the Australian side: One is to adhere to seeing China as a partner rather than an adversary. Two is to adhere to seeking common ground while reserving differences. Three is insisting on not targeting or being subject to third parties (without naming the U.S.), and four is to adhere to building a positive and pragmatic social foundation of public opinion. Albanese said in an interview that, although the meeting between the foreign ministers of the two countries was a “constructive step,” Australia has not changed its position on any issue and will not respond to China’s demands. He emphasized that, “We only follow our own national interest.” Australian Trade Minister Dan Tehan said he was concerned about the four claims made by Beijing and called for not accepting any Chinese demands to repair bilateral relations. Tehan said bluntly, “Australia has not changed. The Chinese government has changed.”

Source: NewTalk, July 11, 2022
https://newtalk.tw/news/view/2022-07-11/783803

Briefings | | July 18, 2022 | Geo-Strategic Trend

Chinese Military Attaché Driven Out of Pacific Islands Forum

The Chinese Communist Party (CCP) has been trying to expand its influence over the Pacific Islands for years. It successfully signed a security treaty with the Solomon Islands which allows for police and military exchanges. However, at the China-Pacific Island Countries Foreign Ministers’ meeting in May, its recent push for a similar security treaty with the whole group of island countries did not go through.

The latest development was at the Pacific Islands Forum which was held in Suva, Fiji from July 12 to 15. When U.S. Vice President Kamala Harris was delivering an online speech on July 13, two Chinese officials entered the media section without proper identification. A Fiji news reporter recognized one of them and asked what his identity was. Was he a Chinese embassy official or a Xinhua news reporter? The Chinese official shook his head as if he didn’t understand English. The Fiji reporter then informed the meeting organizer and the police came to remove those two Chinese officials.

Later people in the diplomat circle confirmed that these two people were the Military Attaché and Deputy Military Attaché from the Chinese Embassy in Fiji.

Source: Radio France International, July 13, 2022
https://www.rfi.fr/cn/中国/20220713-贺锦丽正说着话-两名中国使馆武官遭太平洋岛国论坛会议警方驱离

Briefings | | July 18, 2022 | @CS Geo-Strategic Trend

Former Japanese Intelligence Officer Estimates China Sent at Least 20,000 Spies to Japan

While the U.S. intelligence community is busy investigating Chinese spy cases in its country, the Japan intelligence faces the similar challenge: the Chinese Communist Party (CCP) has sent too many spies to Japan.

Radio Free Asia reported that Masatoshi Fujitani, a former Investigative officer from Japan’s Public Security Investigation Bureau stated in a TV interview that he estimated that China has sent 20,000 to 25,000 spies to Japan so far.

On a Japanese cable channel ABEMA’s “ABEMA Prime” program, Fujitani said, “Through cooperation with intelligence agencies in various countries, (we) estimated that China has sent around 20,000 to 25,000 spies or agents to Japan. Adding (those from) North Korea and Russia, the number of agents in Japan is huge. However, with only 1,700 staff members, our Public Security Investigation Bureau is unable to keep up with the opponents. We can only respond as much as we can within our limited budget.”

Source: Radio Free Asia, July 8, 2022
https://www.rfa.org/cantonese/news/jp-spy-07082022060550.html

Briefings | | July 14, 2022 | @CS Geo-Strategic Trend

Beijing Increases Purchasing of Low-Priced Russian Coal

Though China’s coal demand is decreasing and domestic supply is increasing, since May Russia, has been offering a big discount on coal. Therefore, Beijing has increased its purchase of Russian coal significantly.

China’s National Bureau of Statistics reported that, in the period of January to May, China’s domestic coal production has increased by 10 percent over the same period last year. It has risen to 1.81 billion tons. At the same time, Russia’s coal delivery to China in May increased by 20 percent, to 5.5 million tons; and from June 1 to June 28, the delivery increased by 55 percent, to 6.2 million tons.

Source: Epoch Times, June 30, 2022
https://www.epochtimes.com/gb/22/6/30/n13770387.htm

Briefings | | July 14, 2022 | Geo-Strategic Trend

China’s Most Restrictive Game Ban

Last year, the Chinese government issued an anti-addiction game ban, stipulating that minors can play online games for no more than three hours a week.

According to the Chinese media Yicai, this is the first summer since the implementation of the game ban, also known as the “most restrictive anti-addiction game ban in history.” Normally the summer vacation in China extends from July 11 to August 31. According to the rules, minors can only play games for one hour between 8pm and 9pm every Friday, Saturday and Sunday. This translates into a total of 21 hours of online games during the whole summer.

According to available data from large gaming companies, the share of corporate revenue made from minors has decreased now that the ban has been in effect for nearly one year.

For example, in Q4 2021, after the implementation of real-name registration and facial recognition, the total game time for minors at Tencent decreased by 88 percent from the same period last year. The total traffic of minors decreased by 73 percent annually.

Knowing that some underage players would play the games using the identity of their parents, Tencent claimed that its facial recognition system will come into play in the summer. All adult accounts suspected of being operated by minors will trigger facial recognition during the login and other sessions and the system will start a “round-the-clock patrol.”

Source: Central News Agency (Taiwan), July 11, 2022
https://www.cna.com.tw/news/acn/202207110218.aspx

Briefings | | July 12, 2022 | Economy/Resources

China’s Reaction to Trump’s Election Win

Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

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Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized