China has a terrible debt problem that no one is talking about. Its local government debts are huge, and they rely on real estate developers to finance themselves.
They sell land to developers at high prices in order to obtain revenue. As a result, it is of their interest to keep land prices high, and it is important for them to have a hot real estate market to keep the music playing.
But as China continues to tighten, it is much harder for them to do so.
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