SinoInsight 1
Several major real estate developers in China slashed property prices during China’s week-long National Day holiday, an unusual phenomenon because the holidays are a golden period for property sales. Vanke, one of the largest Chinese property developers, discounted villa projects in Fujian’s Xiamen City by as much as 45 percent (2.78 million yuan, down from 5 million yuan). Other developers offered discounts in the 30 percent range.
During the same period, sales of brand new property in first and second-tier cities fell sharply. In places like Hangzhou, Beijing, Shenzhen, and other cities, developers were only able to sell dozens of apartments a day, a nearly 72 percent drop.
The sudden drop in real estate prices has thus far inspired protests and outbursts of violence from angry homeowners.
OUR TAKE
We believe that falling property prices is a sign that China’s real estate bubble has reached an inflection point. Dropping prices would also inevitably trigger financial risks.
Meanwhile, the obvious shift in U.S. policy on China is already affecting investor confidence and the markets. The central bank’s recent reserve requirement cut may have released 1.2 trillion yuan in liquidity, but it will not help much.
SinoInsight 2
Since U.S. Secretary of State Mike Pompeo hosted the first-ever Ministerial to Advance Religious Freedom in July, there seems to be increased scrutiny of the Chinese Communist Party’s persecution of religious groups:
- The persecution of Uyghur Muslims in Xinjiang Province, which was reported by several Western news outlets earlier in the year, has received greater attention. According to a recent Reuters article, U.S. Commerce Secretary Wilbur Ross is preparing to impose export restrictions on China over the Xinjiang issue.
- The CCP appears to be stepping up a crackdown on Christians in China this year. In a major policy speech on China, U.S. Vice President Mike Pence noted that the Chinese authorities are “tearing down crosses, burning Bibles, and imprisoning believers,” and added that “for China’s Christians, these are desperate times.”
- On Aug. 30, The Economist ran an article titled “Falun Gong still worries China, despite efforts to crush the sect,” which gives an overview of the CCP’s persecution campaign against the Falun Gong spiritual practice. On Oct. 8, BBC Radio broadcast the first of a two-part series on CCP’s forced organ harvesting of Falun Gong practitioners.
OUR TAKE
The heightened attention to religious persecution in China is one of the effects of the shift in U.S. policy on China. Previously, the West and other countries tended to downplay the CCP’s human rights abuses in the pursuit of economic benefits in China. But with President Donald Trump regularly calling out China’s unfair trading practices, intellectual property theft, and economic espionage, the world seems to be shifting its mood on doing business with the Chinese regime.
As the U.S. and its allies become more willing to spotlight the CCP’s persecution of religious groups, the communist regime will come under immense pressure internationally. This pressure will in turn disastrously affect the CCP’s political legitimacy at home.
