New York Post: Real Estate Woes Spell the End for Communist Rule!

China's real estate continues to slump. New York Post reaches shocking conclusion. Guizhou encourages using parents' housing fund for home purchases. Netizens criticize. Wall Street Journal. It only takes a $7,000 debt to end up trapped in China. Ryu, Shenzhen's big three scams, goes bankrupt. Once boasted tech surpassing Samsung. Experts. China's insurance industry in deep trouble. Epidemic heats up. Long queues at Xinyi Hospital and funeral home in Henan. It's all covered in today's China Truths. China's real estate continues to slump. New York Post reaches shocking conclusion. China's real estate crisis appears to be spiraling out of control, with the sector showing no signs of recovery, despite March typically being a period of growth. According to data from CRIC, sales among the top 100 real estate companies in March 2023 were the lowest since 2019 and had decreased by 45.8% compared to the same period in 2023, despite a month-on-month increase of over 90%. Major real estate developers are also facing significant challenges. Country Garden, one of China's largest developers, announced that it would be unable to release its full-year results for 2023 on time due to the need for more information to make accurate accounting estimates and judgments. Another major developer, VANK, reported a 46% drop in net profit last year, which was much worse than analysts had expected. The real estate sector is a crucial component of China's economy, directly accounting for 7.34% of GDP and indirectly contributing to related industries that make up 9.9% of GDP, totaling approximately 17% of the country's economic output. The current crisis, fueled by mounting debt and unfulfilled promises, poses a significant risk to the banking sector and could potentially unravel China's economic prosperity of the past three decades. The New York Post reported that with 65 million homes around one-fifth of the country's total vacant and property prices falling to 2018 levels, the end of the Chinese Communist Party's reign may be near. The report also highlighted that China's official youth unemployment rate has reached double digits, and the Finance Ministry reported a 16% year-on-year drop in personal income tax, suggesting that the actual situation may be even worse than reported, given the Chinese Communist Party's tendency to manipulate statistics. Furthermore, official Chinese data from June 2022 revealed that the unemployment rate among Chinese youth had reached 21.3%, but the Chinese Communist Party has since stopped reporting this data altogether. Furthermore, as previously reported, on March 22, the CCP's Ministry of Finance released data showing that personal income tax in China decreased by 15.9% year-on-year during January and February of 2023. Professor Xin Xinbing from the Department of Finance at National Yunlin University of Science and Technology in Taiwan interprets this as a sign that the income of average citizens is declining. He suggests that this may be connected to the real estate market, stating, the job market is in a terrible state, industries across the board are in a dire situation, and the number of unemployed individuals is rising, leading to a natural decrease in corporate income tax. Simultaneously, China's economy is being severely impacted by the exodus of capital and personnel. The New York Post reported that in 2023 alone, a staggering $500 billion has fled China, and the hemorrhage is still continuing. Moreover, the loss of talented individuals and the sharp increase in defectors have further exacerbated the wounds inflicted on China's economy. The report asserts that the underlying cause of this situation is the Chinese Communist government's return to the ideology of communism. It states, in the minds of greedy Communist Party officials, the best way to eliminate capitalism has always been to eliminate the capitalists themselves. The conclusion of this story is clear, only destruction. The headline of the article conveys the message, the CCP is over. Guizhou Encourages Using Parents' Housing Fund for Home Purchases, Netizens Criticize. In an attempt to stimulate housing purchases, officials in Xiannan Prefecture, Guizhou Province, have introduced a series of new regulations that include allowing unmarried children to withdraw their parents' housing provident funds to buy a home. This move has sparked widespread criticism among Chinese netizens. The new housing policies in Xiannan Prefecture, effective from April 1, 2021 until March 31, 2025, offer various incentives targeting college graduates and young talent. College graduates who have consistently contributed to the housing provident fund for at least six months and are purchasing their first self-occupied home in Xiannan Prefecture after graduating can receive a 10% increase in their loan amount, capped at 550,000 yuan, about 76,065 U.S. dollars. Additionally, young talents under 35 recruited through talent introduction channels are eligible for a maximum loan of 600,000 yuan, about 83,000 U.S. dollars, for their first self-occupied home purchase in the area. Moreover, the new policies eliminate household registration restrictions for off-site provident loans, extend the maximum combined second-hand housing provident fund loan term and housing age to 50 years, and permit unmarried children to use their parents' provident funds, or vice versa, for down payments on their first local self-occupied home purchase, with a minimum down payment of 20% of the total house price. However, the public response has been overwhelmingly negative. Critics argue that rather than focusing on boosting wages, the authorities are encouraging young people to drain their parents' hard-earned savings, saying that with the main goal of draining the pond to catch fish, leaving the whole family in debt. Some have pointed out the inherent unfairness of the policy, as many families don't have access to housing provident funds in the first place. Wall Street Journal. It only takes a $7,000 debt to end up trapped in China. Recently, many foreign executives in China are being restricted from leaving the country by the Chinese Communist Party. In detail, the Wall Street Journal reported on March 31st that a search of China's online court database, containing millions of documents, uncovered 37 cases of foreign citizens being banned from leaving the country. These cases include Americans stranded in China due to overdue payments or debts, an Iranian businessman who was unable to leave China for months because he owed an employee $7,000, and even more alarmingly, a U.S. executive who once headed a European company's Shanghai branch has been barred from leaving China for six years due to the company's unpaid wages. However, investigations by human rights groups suggest that the actual number is much higher. Experts have analyzed the underlying reasons for this phenomenon. Mr. Li Hingching, an economist at the Washington Institute for Information and Strategic Studies, attributes this to the lawless nature of the Communist Party's system. Similarly, columnist Wang He argues that the CCP's practice is an abuse of domestic justice, stating that the judiciary is not independent and is manipulated by those in power to restrict anyone from leaving the country, making the entire operation a black box. Last year, the human rights group Safeguard Defenders released a report highlighting that exit bans have become a significant tool for the CCP to suppress human rights, and anyone can become a victim. The report estimates that there are at least hundreds of thousands of cases of people being banned from leaving the country, with the scale of restrictions expanding annually. As China's economy declines, foreign executives face increasing risks in the country, which analysts believe will accelerate the withdrawal of foreign investment. Mr. Wang He notes that these travel bans have dealt a significant blow to foreign interests in China, while Mr. Li Hingching emphasizes that the lack of continuity and transparency in China's policies has eroded the confidence of investors and operators, leading to a loss of faith in the country among foreign merchants. The U.S. State Department has consistently listed China as a country to reconsider travel to since March, further underlining the growing concerns surrounding the business and investment climate in the country. Riyue, Shenzhen's big three scams, goes bankrupt, once boasted tech surpassing Samsung. Royal, a once-promising Chinese tech giant known as one of the three big frauds of Shenzhen, has reportedly filed for bankruptcy with the Shenzhen Intermediate People's Court of Guangdong Province. The company, once claimed its technology surpassed that of Samsung and Huawei, had successfully raised nearly 10 billion yuan, approximately $1.4 billion, and was considered one of the hottest companies in recent years. Public records on Tianyanka reveal that Royal Technology currently has more than 20 entries as an executee, with a total execution amount exceeding 3 billion yuan, nearly $415 million. Royal Technology was founded in 2012 by Liu Zihong, Wei Peng, and Fan Junchao, all engineering graduates from Stanford University. The company specializes in the manufacture of flexible displays and sensors for use in various human-machine interface products, such as foldable smartphones and other smart devices. With strong support and subsidies from the Chinese government, Royal Technology attracted significant attention, including a special report on Liu Zihong by the state-owned broadcaster CCTV. The company's 13 rounds of financing drew investments from major banks, totaling 10 billion yuan and resulting in a valuation of 57.7 billion yuan, nearly $8 billion, cementing its status as a unicorn company. The term unicorn company was originally coined by American investor Aileen Lee in 2013 to illustrate the rarity of companies reaching a valuation of over $1 billion within a short time frame. Now, with the declining number of unicorns and the downfall of many, this concept is being re-examined in investment circles. However, Royal Technology's fortunes took a turn for the worse after it applied to be listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange on December 31, 2020. By December 2021, the company was facing financial difficulties, with employee salaries and supplier payments being delayed. On March 29, 2024, Royal Technology and its subsidiaries were subjected to bankruptcy review, leaving shareholders to bear the ultimate cost. Despite enjoying preferential policies from the Chinese government for high-tech enterprises, Royal Technology failed to deliver market-ready products. As a result, it is now known, along with BGI Genomics and Guangqi Science, as one of the three big frauds of Shenzhen. An investor told reporters, the industry had already determined that this company had failed many years ago, it's just that the procedural bankruptcy came a few years late. Experts, China's Insurance Industry in Deep Trouble The proposed changes to China's insurance law, particularly the elimination of the guaranteed repayment clause for insurance-based wealth management products, have sparked a heated debate throughout the country. The controversy was brought to light by a front-page article in Caixin Weekly, which revealed that the insurance sector is grappling with a shortfall of hundreds of billions of yuan due to numerous high-profile risk incidents in recent years. The current situation in the insurance industry is not merely about potential risks, but rather risks that have already materialized. Estimates suggest the existence of up to 600 billion yuan, nearly 83 billion US dollars, in high-risk assets, with some projections placing the figure even higher. As China's economy slows and investment returns diminish, the volume of risky assets is expected to grow, exacerbating the challenges faced by the insurance sector. The draft insurance law, currently undergoing amendments, includes a new clause that would allow for reasonable changes to insurance contracts if the assets of a taken-over insurance company are insufficient to pay off all debts or if the insurance business is transferred legally. This proposed change has sparked discussions and commentaries online, with renowned Chinese financial writer Wu Xiaobo warning that the end of guaranteed repayment is an inevitable trend and that investors should prepare for long-term low returns. The Caixin article drew parallels between the current situation in China and the bursting of Japan's economic bubble in the 1990s, highlighting the practices implemented by Japanese authorities to address the wave of bankruptcies in the insurance industry. Despite the collapse of seven insurance companies in Japan, all policies maintained the repayment of principle and even generated some returns, demonstrating the resilience of the Japanese insurance industry during the financial crisis. However, China expert and North American investment consultant Mike Sun believes that Chinese insurance companies are facing a crisis similar to what Japan experienced and are on the road to bankruptcy. The discrepancy between the high interest rates promised to customers and the declining returns on investments has resulted in interest rate spread losses, putting insurance companies in a precarious position. Although China's insurance companies may not go bankrupt immediately, they are holding out and waiting for the authorities to bail them out. The question remains as to how much money the authorities can put together to address the 600 billion yuan black hole in the insurance sector. According to Mr. Sun, even if only a small number of companies can be saved, it is still the best possible outcome. As the debate surrounding these changes continues, Chinese investors and financial experts are left to grapple with the potential implications of the proposed amendments and the uncertain future of the insurance industry in the face of mounting risks and economic challenges. Epidemic heats up, long queues at Xinyi Hospital and Funeral Home in Hunan. This is the latest update about the new coronavirus epidemic in China. The situation continues to worsen, with residents from various regions reporting overwhelmed hospitals, numerous deaths, and local authorities concealing the true extent of the outbreak. In Xinyi County, Hunan Province, the situation is particularly severe, with a surge in sudden deaths and long queues at hospitals and funeral homes. On March 31, Wang Wei, pseudonym a resident of Xinyi County, told NTDTV that recently, six people around him died suddenly, including his best friend. He said, the hospital attributed them to cerebral infarction and myocardial infarction. It's terrifying. The youngest was around 28 years old, and the oldest was just over 60. My best friend was around 40. After resting at night, he was gone the next day. He didn't go to the hospital. Mr. Wu, a resident of Yincheng City, Jiangsu Province, stated that many local people are coughing and experiencing sore throats. Hospitals are overwhelmed, and many people have died from the virus, but the authorities are concealing the true extent of the outbreak. Meanwhile, Mr. Dai, a Beijing resident, feels that it is a blessing to be alive now because, in the past few years, many people around him have died due to the pandemic. Recently, some people around him have contracted white lung disease and nearly died. He said that there are people of all ages hospitalized, but hospitals don't acknowledge it as white lung, they just say it's pneumonia. Let us know your thoughts on today's topic by leaving a comment below. If you've found this video helpful, please share it with a friend, it inspires us to continue creating more quality and reliable content. Don't forget to like and subscribe for more interesting insights from China Truths. Thanks for tuning in.