China’s economy hits a slump as the regime pursues its “Zero-Covid” policy to tame the spread of COVID-19 with widespread lockdowns and mass quarantines. At the same time, housing prices are falling, and news of home buyers refusing to pay mortgages for unfinished buildings has been reported in many cities. As a result, the Chinese regime took action to solve the issues.

Radio Free Asia cited Reuters as reporting that investors began selling Chinese banking and real estate stocks and corporate bonds issued by real estate developers on Thursday out of concern that the strike might affect the financial system.

In addition, Nikkei Asia, the nation’s top banking regulator in China, has vowed to speed up the completion of hundreds of unfinished housing projects.

According to a report by state broadcaster CCTV, which cited an unnamed official, the China Banking and Insurance Regulatory Commission announced on Thursday evening it would improve coordination with housing and construction agencies, as well as the central bank, to help local authorities with “guaranteeing the delivery of homes.”

Radio Free Asia reported that many homebuyers across China are going on mortgage payment strikes to protest developers’ failure to meet construction schedules.

According to Japan’s Nomura, between 2013 and 2020, developers are estimated to deliver only about 60% of the homes sold before actual construction. China’s outstanding mortgage loans increased by $3.9 trillion during that time.

According to a report published by Citigroup Inc. on Wednesday, as of July 12, buyers of 35 residential projects across 22 cities have decided to stop paying mortgages due to project delays and a drop in real estate prices. This action, however, would put their credit rating at risk.

Citigroup stated that the move might result in bad debts of up to $83 billion. As a result, large state-owned banks like China Construction Bank and the Industrial and Commercial Bank of China would be affected.

A document named “Summary of Loan Suspension Notices of Unfinished Buildings in Various Provinces and Cities of the Country,” revealed that by July 13, buyers of apartments in over 110 unfinished buildings across 21 provinces decided to stop paying their mortgages.

The report said the buyers were linked to 32 unfinished projects in Henan, 15 in Hunan and Hubei, eight in Jiangxi, and seven in Shaanxi.

The action affected several well-known real estate companies, including Shimao, Greenland, Aoyuan, and Xinyuan.

A former financial industry employee surnamed Song told Radio Free Asia, “Judging from the current economic situation in China … if people refuse to make repayments [companies] go bankrupt.”

He added, “All aspects of banking and credit reporting will be affected, but regular folk don’t care any more, and are lying down because they have lost faith in society as a whole.”

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