S8 Ep130: PREVIEW — Fraser Howe — China's Chronic Property Market Crisis Persists Due to Government Refusal to Clear Debt. Howe explains that the Chinese government created and sustains a chronic property market crisis by refusing to permit real estate values to cl

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John Batchelor

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4.6 • 2.7K Ratings

🗓️ 26 November 2025

⏱️ 2 minutes

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Summary

PREVIEW — Fraser Howe — China's Chronic Property Market Crisis Persists Due to Government Refusal to Clear Debt. Howe explains that the Chinese government created and sustains a chronic property market crisis by refusing to permit real estate values to clear at severe discounts, unlike the U.S., which aggressively resolved its debt burden through market mechanisms. The government prevents acute price collapse, converting a short-term correction into a long-term structural drag on economic growth lasting well over five years—a millstone constraining China's broader economic performance and development capacity.

Transcript

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0:00.0	This is John Batchel. Colleague Fraser Howey gives a very quick, accurate lesson in what's wrong with the Chinese economy.
0:08.8	The refusal of the government to give up on the failures of the property market, to sustain it by subsidizing and looking the other way and refusing to clear it
0:21.3	by letting the properties go for severe markdown,
0:26.0	which is how the U.S. cleared its debt in 2008-2009.
0:30.1	It's called a recession.
0:31.9	The Chinese Communist Party caused this problem,
0:34.7	and the Chinese Party is sustaining this problem. More of Chinese probably party is sustaining
0:37.5	this problem.
0:39.4	More of this tonight. Here's Fraser Howie.
0:43.3	It depends on how much money
0:45.2	you lose. Let's put it this
0:47.4	way. China has, whereas
0:49.3	perhaps in the West or in the States
0:51.3	you would have seen an acute collapse
0:53.5	in price, the market would have cleared, banks would have gone bankrupt, the, you would have seen an acute collapse in price.
0:55.6	The market would have cleared.
0:56.8	Banks would have gone bankrupt.
0:58.3	The landers would have gone bankrupt.
1:01.5	You know, house prices down 60, 70 percent.
1:04.6	And then people step in to buy them at bargain prices.
1:09.0	What you have in China is the government's very good at stopping acute problems, but they merely turn them into chronic problems. So you have this property millstone hanging around the economy for well over five
1:17.6	years now, and will continue to do so until you actually clear this, you know, this backlog of
	...

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