Today, I went shopping at a big shopping mall that is opened just 3 years ago. I found that many shops along the street have a note that says “shop for rent”. These shopfronts has been vacant since a long time ago. These shops are all more than 300 square meters. At one point in the past, these shops rented for more than 50,000 yuan per square meter. One of those shops was sold for about 15 million yuan previously. If someone bought these shops by taking out a bank loan, the bank’s interest alone will be near million.
In Communist China, those who buy a house by taking out a bank loan are typically called a “house slave.” Why are they slaves? For the ordinary working class people with limited assets, it takes the full savings of both husband and wife, plus the savings of both parents, and a huge bank loan in order for them to buy an apartment unit. To add insult to injury, the land of the property is merely a leasehold by the Chinese government, which means the purchasers do not even get the land ownership.
The “house slaves” in China will spend the rest of their lives saving money in order to repay their bank loans. Three things they are most afraid of are: the need to spend money to see a doctor, the need to spend money to gain favours, and income loss from unemployment.
People from the upper income classes will buy shops at good locations for high prices, mostly for investment purposes. These so-called “investors” will borrow from banks to the maximum. Then rent out the shop and use the rent to repay the bank loan. This is called “renting a loan.” What they worry most is that the shops cannot be rented out, but the huge bank interest has to be repaid every month.
According to statistics, the number of house slaves in Communist China has reached more than 400 million, and the per capita mortgage loan is 1 million.
When the economy goes down, lending activities increase. Why?
Now that the Communist China’s economy is on the verge of collapsing, a large number of businesses are closing and workers are losing their jobs. According to official statistics, the rate of default on mortgages and discontinuation of real estate (before the loan is paid off, the house is mortgaged to the bank. A discontinuance means that the homeowner voluntarily abandons the house and no longer repays the bank loan) has been soaring. Alibaba’s online auction of out-of-office houses was 500,000 at the end of 2019, and it will soar to 1.15 million by June 2020.
Under such economic environment, the people’s ability to repay loans is greatly reduced, and the risk that the money lent by banks will not be collected greatly increases. If this were to happen in another country, the banks will be tightening their lending policy and be less willing to lend money. Right?
In an almost miraculous turn, banks in China are now more willing than ever to lend money, and the Chinese people seem to be able to borrow money more easily than ever. Unbelievable?
In addition to the thousands of banks, large and small, there are also many providers of shadow banking in China. All these financial institutions are controlled directly by the Chinese Communist Party.
In 2017, there are more than 500 Internet financial platforms on which money can be conveniently borrowed, including the infamous P2P borrowing platforms. After P2P was exposed to be a fraud and was almost entirely shut down in 2020, there are still at least a few dozen financial platforms on which money can be conveniently borrowed.
A few examples of loan products by shadow banking providers are: the anti-virus software provider Qihoo 360’s 360 loan, Jingdong’s Jingdong loan, WeChat’s WeZhong Bank, Alibaba’s Sweet Orange Loan, Baidu’s Du Xiaoman loan. The loan threshold of these products is extremely low, age 19-60, which means almost anyone can borrow tens of thousands to hundreds of thousands of dollars.
Knowing that the people’s ability to repay is getting worse and worse, the risk of not getting back the money lent out is getting bigger and bigger, why are Chinese banks are still dying to lend money out? Are these banks are stupid? Are the internet financial platform (shadow banking provider) stupid? Is the Chinese Communist government is stupid?
The CCP’s ultimate goal is to control its people
The Chinese Communist government is certainly not a fool. It has its own sinister intentions in doing so. Even if all the money lent by these banks and platforms cannot be recovered, the Chinese Communist Party can simply print more money (RMB) for them, they will not collapse and will not trigger a systemic financial collapse.
In fact, what the CCP hopes is that the people keep borrowing, and borrowing more and more. One day, there will be more than what they can repay in their lifetime, or what their children can repay. More ordinary Chinese people will be categorised into the “Credit Investigation Black Accounts”. According to the CCP’s policy, those who are blacklisted in the “Credit Investigation Black Accounts” will have many restrictions, which affect their ability to travel and daily life.
Therefore, there is only one goal that the CCP does this for: 100% control of the people. Like its vaccine plan, the CCP wants to feed the people with “zombie pills” in order to have full control on them. In the end, the 1.4 billion Chinese people will be used as a bargaining chip, by exchanging the cheap Chinese labour with the globalist elites from the West.