SinoInsight 1
China’s new property market control policies have been in place for a year. But sales of commercial housing in 2017 hit new volume and sales records, according to official statistics. For instance, total sales area was 1.69 billion square meters, or an increase of 7.7 percent from 2016, while total sales amount was 13.47 billion yuan ($2.14 billion), or an increase of 13.7 percent from the previous year.
OUR TAKE
1. After the introduction of property market controls in March 2017, China’s tightly regulated first-tier cities saw property prices stabilize and drop. Prices in second-tier cities skyrocketed. Meanwhile, there was a property grab in third and fourth-tier cities after the introduction of a scheme that saw local government give cash instead of a new apartment to residents whose homes were being redeveloped.
2. Many Chinese are placing bets on the outcome of the Sino-U.S. trade war. To preserve economic stability, the Chinese Communist Party can be expected to increase liquidity, a tactic that it has tried and found to have worked in the past.
3. It is unclear if the CCP’s financial controls will work. The Chinese regime faces a completely different economic and international climate. In particular, President Donald Trump has shown that he will go tough on China, unlike previous presidents.
The CCP regime will not let up on its efforts to deleverage local government, the banking sector, and state-owned enterprises, as well as deflate the property bubble. But before the Sino-U.S. trade war commences, the CCP would likely shift the debt burden to the Chinese people to preserve the property markets—a practice that is characteristic of the CCP.
SinoInsight 2
Recently, the Chongqing officialdom has been “falling in line” to criticize disgraced Chongqing Party secretaries Sun Zhengcai and Bo Xilai. For several days running, local newspaper Chongqing Daily has published many statements from Chongqing officials or different societal groups that call for a “comprehensive cleansing of Sun Zhengcai’s malicious influence and the pernicious influence of Bo Xilai and Wang Lijun.”
OUR TAKE
We believe that the investigation of Sun Zhengcai’s involvement in a political coup is coming to a head. The statements in Chongqing Daily are a precursor to a purge of the local officialdom and a prelude to the conclusion of the Sun case, which was announced in July 2017.
Expect Chongqing officials who are linked with the Sun case to be investigated. The entire Chongqing officialdom is now at high risk.
SinoInsight 3
“The U.S. has confirmed that Kim Jong Un is willing to discuss the denuclearization of the Korean Peninsula,” U.S. officials told several news outlets on April 8.
OUR TAKE
We wrote in last week’s SinoWeekly Plus that the “Xi Jinping-Kim Jong Un meeting forebodes peace on the Korean Peninsula.” News that Kim is willing to talk denuclearization further affirms our assessment.
See our previous coverage:
Decoding the Xi-Kim Meeting in Beijing
Xi-Kim Summit Foreshadows Peace on the Korean Peninsula
Decoding K-pop Diplomacy in North Korea
