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The biggest fraud in history just broke China's economy

Statrys

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0:00 Intro
01:48 The Verdict
03:32 The Domino Effect
05:17 Who Pays
06:48 China Isn't Buying
08:01 The Overflow
11:17 The Japan Question

This month, 6 million Chinese families will pay a mortgage on an apartment that does not exist. Half built, sold years ago, abandoned across more than 200 cities.

The man who sold most of them was once the richest person in China. Xu Jiayin built Evergrande into the biggest property developer the world has ever seen, was worth 47 billion dollars, and just got life in prison for cooking the books. Chinese social media said the sentence was too soft.

He left behind 300 billion dollars of debt and a construction sector on its knees. But the real story isn't the fraud. It's what happens to the factories that were built to fill those flats, and where their production goes now that nobody at home is buying.

In this video I explain how one developer broke the momentum of 1.4 billion people, why Beijing is studying Japan in 1989 line by line, and why the containers leaving those ports are landing in your favour if you buy from Asia.

#Evergrande #China #realestate

20 Comments

@sebastianniqvist3144 6 days ago (edited)

The Evergrande dude aged like 35 years in an instant.

@FiatLuxWithin 7 days ago (edited)

They just didn’t hold the founder accountable but also imprisoned 40+ of the executives of Evergrande.

@charleswillcock3235 8 days ago

Ponzi scheme is the word springing to my mind.

@TINSTAAFL1 8 days ago

Hui Ka Yan was a symptom, not the sole cause. The underlying issue was systemic: local Chinese governments relied heavily on land sales for revenue, while Beijing encouraged debt-driven real estate growth for decades until enforcing the "Three Red Lines" deleveraging policy in 2020.

@carloslanfranco4365 8 days ago

i went to china and wrote my thesis on this in 2000. it was obvious back then. even my professors didn't care.

@DilfayzXalilov 7 days ago

Hello, Mr. Bertrand

Can you create a video about Uzbekistan?
I am a native Uzbek and a big fan of your channel!

@JosephQPham 7 days ago (edited)

Notice that in the US, the development companies would be bailed out, tax payers would end up covering for the cost to the investors (not the supplies nor the buyers), leaving buyers out of their money and no homes. In China, the people behind the ponzi scheme went to jail instead of being bailed out. The government stepped in to finish 7.5 million homes (the number in the video is only 0.5 million homes and is outdated). So most if not all buyers have homes now. In the US after those companies get bailed out, the people behind the ponzi schemed would be let go with severance pay in the millions, and can live freely with their stolen gains. I feel sad as an American about how our system rewards scammers and leave both the general tax payers and the buyers holding the bag.

@peterkramer9740 8 days ago (edited)

I enjoy your presentations.
I’ve watched most of them, especially the ones on China.
Thanks for making them available.🤝

@Lin-lcp 8 days ago

This is an incomplete story. When the Evergrande crisis hit, the Chinese government explicitly stated: "Houses are for living, not for speculation." In other words, the central government made a deliberate decision not to bail out Evergrande.

What matters most is that after 2017, when Trump launched the trade war, the Chinese government strategically pivoted toward high-tech industries. Banks were instructed to cut lending to real estate and instead prioritize the industries of the future: AI, robotics, semiconductors, biotech, quantum computing, and so on.

@dharmaosman184 4 days ago

Their government tries to monitors the people every move. They know their people all too well.

@AndikaKhairilAkbar 5 days ago

What's worse than an empty apartment? Being homeless in your country.

@AArata63 4 days ago (edited)

The Chinese government didn't save a single one of these real state giants. They simply said "houses are for living in, not for speculations".

Most of these angry people who lost everything were as greedy as people in most bubbles. Buy before anything is built and sell with profit before a brick is laid. Rinse and repeat, until the bubble explodes.

This was the first major bubble and lesson for average Chinese.

@appreciatr 8 days ago

Of all my subscriptions, your videos are the ones I look forward to the most. Thank you

@Rambou92 6 days ago (edited)

That analysis if F$&$*ing MIND blowing! Well done Betrand. That makes Statrys well to consider as a consultancy provider before doing business in Asia.