Pre-order Owners Stop Paying Loans for Unfinished Building Caused a Chain Reaction in Chinese Economy

The Hang Seng Index recently removed seven prominent Chinese real-estate companies, and a large number of owners stopped paying their loans. Owners of unfinished buildings all over Communist China began to sign “Suspension Loan Payment Notice”. They announced that if the pre-sale property failed to resume construction and finish on time, they would stop paying the loan and interest. The latest notice is issued by the owners of Shanghai Lingang New Area.

 The notice first came from the site developed by Xuchang Sunac, Henan, and was later followed by owners from nearly 200 unfinished properties across 22 provinces and cities including Zhengzhou, Changsha, Zhuzhou, Jingdezhen, Nanning, Shijiazhuang, Changchun, Qingdao, Shenzhen, and Xi’an. Many well-known developers who were forced to delist from the stock market due to failure in providing annual reports and default on domestic and foreign debts, such as Evergrande, Shimao, Aoyuan, Sunac, Greenland, Fantasia, and Yango. Many unfinished building projects have been completely shut down. Due to illegal misappropriation of pre-sale funds by developers, the property cannot be delivered to owners two years after the preplanned finish date. Although the majority of owners went to the site to defend protest for their rights, the construction work was still yet to resume.

 Some banks should take responsibilities for unfinished projects, according to the notice. The owners accused banks of illegal loan and failing to manage and regulate the banks’ funds, including illegally issuing mortgage loans before the main structure of the house is not capped, and transferring mortgage loan funds to non-custodial accounts.

 It is warned by Miles Guo as early as 2017, that Communist China’s real-estate market would collapse. Chinese Communist Party’s banking system heavily relies on housing loans. In addition, some rural bank customers in mainland China cannot withdraw cash recently. This crisis that has ramifications to all walks of lives, and first step of the domino effect is triggered. The Chinese dictatorship is going down on a death spiral starting from this financial crisis.