Tag

Professor Liu Jing – Professor of Accounting and Finance, Director of Investment Research Center, CKGSB Since the beginning of 2022, the real estate giant Evergrande has repeatedly reported failed overdue coupon payments. The crisis started in September 2021 when the company first announced it was facing unprecedented difficulties, which in response to the Chinese government …

Continue reading “Series: China’s Real Estate Problem
1. The “Three Red Lines””

Professor Liu Jing – Professor of Accounting and Finance, Director of Investment Research Center, CKGSB While the “Three Red Lines” policy was an attempt to help overleveraged companies, it was also originally introduced because regulators thought the industry was too profitable – that it was accumulating large amounts of capital and driving up house prices. …

Continue reading “Series: China’s Real Estate Problem
2. The Role of Real Estate Companies”

Professor Liu Jing – Professor of Accounting and Finance, Director of Investment Research Center, CKGSB What are the structural problems embedded in China’s property sector? Firstly, it is important to look at the supply and demand of land. Approximately 54% of the cost of a new homes come from the land and associated fees. Whether …

Continue reading “Series: China’s Real Estate Problem
3. The Two Bubbles in China’s Property Market”

By Professor Liu Jing – Professor of Accounting and Finance, Director of Investment Research Center, CKGSB The underlying cause for the housing bubble does not lie in real estate speculation but on the structure of the sector, stemming from the local and central government’s tax-sharing system, as well as the core role that local governments …

Continue reading “Series: China’s Real Estate Problem
4. Land Finance and Local Government Revenue Structures”