Evergrande: the end of China's property boom | FT Film

The person who did the graphics should get a raise. Very intuitive and nice.

I feel like this video missed a couple key points which make the problem much easier to understand: first, property is the primary investment vehicle for most Chinese people, which is why property values got so high. They don't put their money into financial markets like most of the west does, they pump it into their homes. Second, real estate companies could use these sky high prices to leverage their property assets for debt. And some of them, like Evergrande, seem to have been overestimating the value of their assets in order to get larger loans. Now that demand is falling, they can't sell their assets at anywhere near the estimated value and thus can't pay back their debt.

It’s not just construction workers! It also affects manufacturers like glass, steel, etc also gets affected. The real estate business really was an economic driving force because it affects so many more types of jobs.

You don't know what the Chinese (stock)market will do, owning Chinese stock does not mean you own a part of the company, please be aware of that. BYD is making mini cars, hybrids and ice cars, not so much BEVs. Numbers are not looking that great too. Their batteries are great tho and will be used by Tesla as well.

Also the fact that the buildings are shoddily built to siphon as much money from the project to private pockets. Even the finished projects are not of the quality expected by the investment.

The topic of ghost cities and real estate overdevelopment in China has been a topic of discussion and concern for at least 10 years now. Crazy that this problem was allowed to grow so large when seemingly everyone saw it coming from a mile away. Classic human greed.

An underlooked aspect is that most Chinese people don't actually pay much in taxes, meaning that the local governments, (the party technically owns/is all of the land) makes much of their revenue from selling the 99-year land leases that developers need to build upon. While it's been brought up time and again in China, the incentives and culture were all just too strongly resisting the needed reform.

I was on holiday from Dubai to Guanzhou with my family in 2013 and stayed at the Ramada Plaza for a week! I was fascinated to see the buildings all over the city ! Truly amazing!

To Russell Birkett, the person who did the graphics for this FT segment — Bravo! Amazing visuals. Keep up the good work 👍👍

There is a big miss in this video. The analysis does not take into account one of the key drivers, outside of raw urbanization. This is the use of property as investment. In the West, most people invest in stocks and bonds. In China the populace has little or no understanding of this. Thus, you see people buying multiple properties, mostly apartments, as investments. With rising prices, this made sense to them, and it was something they understood. One of the outcomes of this is the empty cities one sees only in China. Some of these are massive. The sector is massive for another reason. Much of the income for local government comes from selling land. Thus, they encouraged this massive amount of property development.

With the way the markets are moving, we might have to hold longer than expected, I think a video on "How to profit from the present market admist the recession will be more appreciated. I mean I have heard of people still making more than 100K within few months, and I'd like to know if it still possible.

Its truly amazing how the connection between actual householder demand and apartment values has never been seen as the real determinent of viability in China. Unquestioned credit has driven this process and unless occupier demand suddenly firms up the bonds will be defaulted as developers are wound up and new owners buy in at firesale prices.

It always amazes me when people seem surprised by extensive growth, which surely cannot last in the long term, tailing off and even resulting in bankruptcy due to over-reaching. I've seen it happen time and time again, even in companies I've worked for, and that level of growth always seems to be the forerunner of just as stunning a collapse. I am no financial or strategic expert, but I wonder why lessons from worldwide organisations aren't learnt?

A huge change that started over 15 years ago. That’s when I started seeing posts of the abandoned Chinese shopping malls on the internet. Thanks for the videos.

In a word scary. Because ultimately the global market is so interlinked and the world has been decoupling from China. This creates massive economic stress and a scenario no model or econometric analysis would have predicted.

One of the problems that seems to be missed in this documentary is strange to the capitalist mind. A lot of property market is actually a lease, because China does not practice capitalism for individuals. Local governments lease property long term to individuals, using that as an income in place of taxes that do not exist. If buildings are not getting built, many local governments do not get financed from property leases, and thus cannot provide services. Emergency services, health services, etc. The financial impact to the world is going to be heavy, but it will lead to restructuring. In China itself though, the level of chaos and misery is not even known yet.

Why does anyone trust Big 4 auditors anymore is beyond my understanding. Every major financial disaster has shown that the Big 4 have certified everything as ok as long as they were well paid.

China has been off the spotlight lately, the war sure helped them to shift the focus out of their economic issues

Whether it's your superbly researched and immaculately written FT Newspaper and Editorial articles or your short documentary films, the quality of all your content is simply outstanding. Good Work and Keep it up Team FT!

Dude the audio/music selection on this video was INSANE on this film. 10/10. Now i'm completely frustrated because I don't know what genres these tracks come from and where I can get more of it.