Two weights, two measures – The cryptosphere remembers the true China’s hunt for crypto miners in 2021. If the one-party regime is boundlessly harsh with Bitcoin (BTC) and cryptocurrencies, it turns out a lot less looking on other sectors. Indeed, the projects started but never finishedsink real estate on Chinese territory. To the point that the central bank must spend a fortune to help this sector, while she banned crypto-assets as messy.
How Much Bitcoin Costs China? Real estate costs him 200 billion yuan in any case
In China, Bitcoin and its ilk are very badly seen. The king of cryptos is even sometimes simply a Ponzi deal ! However, this is not not him which will cost a real fortune to Chinese taxpayers.
Indeed, the many real estate projects are at a standstill in the country. The People’s Bank of China (PBoC) seeks to generate the trifle of 1 trillion yuan to solve this thorny problem. That is the equivalent of approximately $148 billion.
As the Financial Times reports, China’s central bank will begin by spin the printing press to fill the most urgent gaps. It will thus print 200 billion yuan low-interest loans (nearly $30 billion) “from thin air” (From nowhere).
The PBoC hopes that the commercial banksto whom these low-interest loans will benefit, will in turn lend (at higher rates) to generate the targeted 1 billion yuan. This in order to “partially fill” the lack of financing to complete all this real estate started and then left fallow.
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Up to 1 out of 2 real estate projects remained unfinished
As the chart below from the Financial Times shows, this is also a problem that date not yesterday. Since at least 2008, the completion rate real estate construction suffered major weaknesses.
Still in the month of march of this year 2022, companies have completed only 714 million m² of construction on 1,409 million m² of projects started. Either only half.
And even with the PBoC’s money printing: it’s not won! In any case, this is the opinion of Dan WangChief Economist at the Hang Seng Bank China :
“A large number of unfinished residential projects have already been sold, or are located in underdeveloped cities where the purchase and rental of housing is weak. This limits the number of cases in which the bailout fund can invest without incurring a loss [ndlr : voir ce prêt d’État être remboursé]. »
Given the problems with its real estate sector, it is unclear why China does not deal with it more. Instead, she stubbornly wants to ban Bitcoin regularly. Perhaps because this new money form is not not printable at will ? This is all the more unfortunate, as it is a waste of timesince Chinese crypto-enthusiasts always eventually figure out how to continue in the hiding. Thus, after a few months of banning crypto-mining, the Chinese territory has already become the 2nd world producer of bitcoins.
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