China’s real estate mess put global economy on crutches
Beijing: The deep recession in China’s real estate companies is becoming a major problem for the country as well as for the world’s economy.
The property market was one of the few cherished destinations for household savings. The developers and homebuyers were also willing to take the loans from the banks but these good days for China ended last year. The household debt touched over USD 10 trillion. And around 27 per cent of bank loans in China are tied to real estate, reported a think tank, Policy Research Group (POREG).
This industry was known to be the biggest job creator in China but now it is termed as “Lehman moment”, in comparison to the 2008 bankruptcy of Lehman Brothers, which was a trigger for the global financial crisis. More so, when the number of empty homes has crossed the 65 million mark (90 million according to some estimates) – enough to house the population of France, and raised the spectre of a global…
