Here’s the some inverted reassurance: One Chinese academic told the South China Morning Post today’s’ that China’s mortgage market is in even worse shape than the U.S. sub-prime market.
Yi Xianrong, a banking and finance expert at the Chinese Academy of Social Sciences, said Chinese banks had been lax as they built up 3 trillion yuan ($396.2 billion) of mortgage lending.
Defaults in the U.S. subprime mortgage market now total about $200 billion, on some $1 trillion of loans, according to Credit Suisse.
“The quality of housing loans are much worse than the subprime loans in the United States,” Yi was quoted as saying by the South China Morning Post.
“At least there has been a credit check system (in the United States) but in China anyone can borrow money to buy a house.”
Damn Chinese. It’s not enough for them to have the largest IPOs — they also have to have an even more screwed up mortgage market.