Hello, this is Klaus.
Something big has happened in China recently,
which might become a milestone event in China's history.
But it hasn’t gained much attention.
Some “lanwei” house owners have united to start a revolution.
Overseas Chinese might not be familiar with the term “lanwei” (unfinished).
“Lanwei” buildings are a Chinese characteristic.
In Europe, America, HK, Macao and Taiwan, finding a lawyer when buying a house is a must.
The buyer will transfer money to the lawyer first.
After the buyer gets the house keys, the lawyer will transfer the money to the seller.
Therefore, there are no uncompleted properties.
But China is different.
Many developers, soon after gaining a piece of vacant land,
set up pre-orders for houses based on only a design plan,
with partner banks issuing loans.
Thus, even though no house has been built,
the government, banks, and developers have already made a fortune.
The poor Chinese people, however, will have already spent their next few decades’ income.
Even if the house goes "lanwei", the buyer will still have a mortgage to pay.
That’s what happened in Jingdezhen, Jiangxi last month.
Over 900 buyers banded together and sent a letter to the city government,
the Urban and Rural Construction Bureau, the Banking Commission and the banks.
If construction hasn’t fully resumed within the stipulated time,
the buyers will, in retaliation, stop repaying their mortgage loans.
They called it "forced loan suspension".
Pay attention to the final paragraph.
“The loss caused by suspension of mortgage loans will be borne by all banks that have issued loans against regulations,
government-related organizations that have failed to monitor funds properly,
Evergrande Jiangxi Branch who moved the funds,
Century Court Project Team and other related parties.
No organization or individual shall again hurt the interests of Century Court clients.
If illegal penalties imposed on Century Court clients persist,
there’ll be a chain reaction whose consequences will be jointly borne by the above-mentioned parties.”
I don't know how you feel about all this.
Color me shocked.
First of all, the buyers have formed a well-organized and disciplined alliance,
a far cry from the usual banner-holding protesters and weeping amateurs.
In addition, they have put forward specific demands and plans.
Finally, they warned, and even threatened, the local government and the banks.
If that isn’t a rebellion, I don’t know what is.
This is so similar to how the Wuchang Uprising started.
When the Wuchang uprising started, the Qing Dynasty was already on the verge of collapse.
Today’s China is still stable in comparison.
The “consequences of a chain reaction” mentioned in the letter have already been happening.
A week after this "forced loan suspension" notice was issued,
over 30 property owners across the country quickly responded.
Two weeks later, that number had gone over 80.
By the time this video gets released,
over 100 buyers will have joined forces and issued the same “forced loan suspension” notice.
The speed is frightening.
Some individual cases haven’t been counted yet.
Shenzhen, a city of a well-established real estate market, has also joined in.
Buyers of properties in key areas in Nanjing have also collectively stopped repaying loans,
and made even more demands.
They moved the deadline forward (next month) and they stopped repaying their loans right away.
Without exception, all of these forced loan suspension notices
are quite similar in that they all threatened the government in the end.
Now look back at the house buyers of Jingdezhen Jiangxi who started all this.
"Consequences of a chain reaction" wasn’t an empty threat, but a real one.
They’ve had their voices heard in an organized and disciplined manner.
They’ve united victims of “lanwei” properties all over the country.
A small spark has indeed started a great fire,
just as Mao Zedong said back then, “A small spark can start a great fire.”
Jiangxi was the birthplace of communist revolutions throughout China.
Therefore, this "loan suspension" incident is no simple matter.
For individual buyers, it is an act of self-defense.
But for the whole nation, it is a revolution.
This incident has shown me the power of unison, which I had never seen before.
Jiangxi created a spark, and now the whole nation is like a prairie on fire.
There are millions of “lanwei” properties involving hundreds of billions of dollars.
The “chain reaction” does not stop there.
The Chinese don’t like losing face, and not repaying mortgages is usually looked down upon.
Once they have stopped repaying loans in great numbers, things will only grow more and more serious.
In recent years, houses have shrunk in value in many parts of China, triggering owners’ angry protests.
These unhappy property owners will probably join in.
Their number is even greater than that of “lanwei” property owners.
Also, due to COVID, many people have lost incomes or even lost their jobs.
With a mortgage too much to repay, they will simply give up.
In addition, housing prices will collapse and fall below the loan prices.
Even those who can normally afford to repay the loans will choose not to.
Then, the real estate industry will have collapsed completely.
Once the real estate industry is finished, China is also finished.
Why?
China's economy relies heavily on real estate.
China's real estate accounts for over four times of China’s GDP,
far higher than the international level,
which is why China has the second largest GDP in the world,
and its GDP per capita is over $10,000.
But in reality, China's per capita monthly income is less than 3,000 RMB.
Most of Chinese people's wealth is in real estate.
In other words, many people earn very little, but they have a lot of assets in theory.
But these assets are merely bubbles, so once the real estate industry collapses, most people will lose all their money.
This would not only affect individuals. The entire banking system would collapse.
Most money in China’s banks is in real estate.
Clients who don’t intend to repay mortgages will also withdraw their cash.
Furthermore, the real estate industry affects many upstream and downstream industries.
Even industries not related to real estate will also be affected.
China's real estate is intertwined with almost everything in China.
For example, Gree Electric, Midea Group, SF Express,
even major airlines, service industries, have invested in real estate.
The RMB is depreciating fast and China imposes strict foreign currency controls.
Both individuals and enterprises tend to invest their money in real estate.
A real estate crisis will lead to an economic crisis,
which will be more severe than the previous ones in the US and Japan.
On the one hand, China's bubble is bigger.
On the other hand, the global economic and political environment is worse now.
An economic crisis will hit China even harder.
Capitalist countries like the US and Japan are free economies.
The impact of an economic crisis on their politics is limited.
It would simply lead to another political party winning the election.
But China is a one-party dictatorship,
and the CCP's reign is based on China's economic growth.
An economic crisis can be a greater blow to the CCP than a political crisis.
Even the impact of the June 4 Tiananmen Massacre was temporary.
It did not affect the whole country.
But an economic crisis can have far-reaching and radical implications.
A large number of enterprises would go bankrupt, and people would lose their jobs.
Everybody would feel the impact.
Now the first shots of a revolution have been fired.
This model of organization applies to all other sectors.
Everybody whose interests have been harmed can unite for a common goal.
This gives me hope.
All right, time to hear your comments.
In our last video, we talked about the violent crackdown in Henan.
Netizen Michael Man said,
“1989: It's my duty.
2022: It's my money.”
Netizen Li Yaodong said,
“For the sake of money, they collude with foreign forces.
Shame on them for relying on foreign countries!
They must be severely punished by law for dividing their country.”
Netizen Full-time hunter said,
“The current state of the rule of law in China is as follows.
Three basic laws: the leader's opinion, the leader's idea, the leader's statement;
Three rules of litigation: big cases - politics, medium cases - influence, small cases - relations.
Three principles of legal validity:
The Constitution gives China a rule-of-law facade.
The law is subject to internal regulations.
Internal regulations are subject to the leaders’ instructions.
The basic state of the rule of law: strict legislation, universal violation, selective enforcement.”
Netizen yanzionly said,
“The most heartbreaking thing about this country is not the recklessness of government officials,
but the fact that ordinary people, who are the majority, keep telling you,
‘China is just like this. You can’t change anything, so get used to it!’
They may be your classmates, colleagues, friends, relatives, or lovers.
They are OK with everybody else being hurt as long as they are not hurt themselves.
When others were fighting for you, where were you?
Now you’ve tasted the iron fist of socialism and know the pain.
However, when the storm blows over, you’ll be a loyal and patriotic slave once more.
Thus, never pity those living like maggots in China.
They bring misfortune upon themselves.”
Well, that’s it for this video.
Like, subscribe, comment and share! Thanks!
This is Klaus. See you next time.