China has started to censor posts about the mortgage protests. Mortgage holders are threatening to not make payments to banks as a way to get the attention of the ruling class and central banks.
Frustrated buyers gathered in Wuhan earlier this month, outside the office of a bank regulator, saying that they wouldn’t make payments for more than 300 unfinished properties across the country. These projects include some from developers such as China’s Evergrande, whose chairman was just forced out.
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The halt in construction activity could impact 4.7 trillion Chinese yuan, or $696 billion, worth of homes in China. It would take 1.4 trillion yuan, or 1.3% of the country’s GDP (gross domestic product), to complete the construction projects, Bloomberg Intelligence analyst Kristy Hung estimated. Property and related sectors account for roughly one-third of China’s $18 trillion GDP, there are fears the fallout from the mortgage boycotts could spill over into the global economy, reported Business Insider.
In China, where the public is controlled harshly, social media companies are required to censor or remove content that “undermines social stability,” like the ongoing mortgage protests. Social media companies have historically fully complied with the ruling class in every country, not just China. They have stepped up on censorship, blocking messages, keywords, and videos of demonstrations, according to a report by Black Listed News.
Searching the hashtag brings back a notice saying: “Due to related laws and rules, the topic page cannot be displayed.”
Censorship is not limited to social media. Analysts at a few securities and research firms were advised by their masters to not discuss the protests. Because of an “order from above”, an employee at a developer was told by his boss that staff had been banned from commenting on the crisis.
The protests’ timing is not good for the Chinese Communist Party, which would prefer social stability ahead of the 20th Communist Party Congress, where the party’s leadership is expected to extend President Xi Jinping’s leadership to a third term.
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Owen Gallimore, head of credit analysis of the Deutsche Bank’s Asia Pacific flow-trading desk said the threats of stopping mortgage payments are definitely worrisome, but it is unlikely to cause major stress to the Chinese banking system.