Nor is the Central government fearful of a property bubble. They're worried about arbitrage. Although I suppose one man's arbitrage is another man's fraud.
Local governments make a great deal of its money by selling land. Oftentimes local government sells this land to a property developer with political clout but little ready cash. The local government then pressures local banks into providing that property developer with discounted loans.
Our cash poor property developer often turns out to be a cousin of the local Party Secretary. His development scheme tends to the ambitious. This naturally causes concern.
The local bank manager worries, but he's not worrying about the bad loans originated under his reign. He's too busy cleaning up the mess of non-preforming loans left by his predecessor.
Fearing for his job, never mind promotion, he sells these loans off for pennies on the dollar; oftentimes, one tends to find, to another cousin of the local party secretary.
Naturally, the technocrats at the People's Bank of China take a dim view on all this. Trouble is our local party secretary has a patron who has a patron and, well you get the idea.
You talk property bubbles, you are a Babe. What idol are you indulging in exactly? I suppose of the Cave with a dash of Theatre and a pinch of Marketplace. Or perhaps we're a little too trusting.
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