This is

CBS I on the world. I'm John Bachelor.

China, the collapse of the real estate market is worldwide headlines these last months.

The failure of Evergrand, the failure of other developers, empty buildings,

you can see through them or the building site remains untouched for weeks. People who have

invested their savings in apartments that are not built are without recourse.

However, the tax base is what is profound now. And I welcome Chris Regal. He is CEO of

scholar.com. This is the scholar report. scholar.com is a global technology firm transforming the retail space.

It has business on all the settled continents, especially Asia.

Chris, a very good evening to you.

The collapse of the real estate market means that we have these empty buildings, you know, two Hong Kongs, three Wall Street, all these artificial constructions over the last 10 years by municipalities across the country,

assuming that the population would show up to occupy them.

Not only has the population not shown up, but the developers are collapsed.

The tax revenue is not there. What does this mean from your information throughout the country not just on the on the coastal cities.

Good evening to you.

Good evening, John. Real estate development in China for most of the provincial and local governments accounts for roughly one third of their income.

With that stopped, halted, declining, you have provinces that continue to have severe liquidity problems.

The coastal provinces tend to be wealthier, the interior provinces not quite as

wealthy. In many of those interior provinces you have government workers

that have not been paid in extended periods. In the coastal provinces you're

starting to see cracks there as well. That's translating also to countrywide crackdowns on tax evasion,

countrywide crackdowns on tax collection, as well as something as simple as Chinese government officials no longer being able to eat out, go to restaurants, go to clubs,

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