PBOC Governor Yi Gang: We Hope the Housing Market Can Achieve Soft Landing
4th November 2022 | Hong Kong
China central bank People’s Bank of China (PBOC) Governor Yi Gang is hoping the China housing market can achieve a soft landing. PBOC Governor Yi Gang: “With ongoing urbanization in China, we hope the housing market can achieve soft landing.” The message was recorded and broadcasted at the Hong Kong Global Financial Leaders’ Investment Summit, a 3 days event attended by 200 leaders from 120 financial institutions including banks, securities firms, asset managers, sovereign wealth funds, private equity, venture capital firms, hedge funds & insurers. The 3 days event (1/11/22 to 3/11/22) featured speakers including James Forman (Chairman & CEO Morgan Stanley), Colm Kelleher (Chairman UBS), David Solomon (Chairman & CEO Goldman Sachs), Noel Quinn (Group CEO HSBC), Bill Winters (Group CEO Standard Chartered), Liu Jin (President Bank of China), Jin Liqun (President & Chair Asian Infrastructure Investment Bank), Rob Kapito (President BlackRock), Joseph Bae (Co-CEO KKR), William E. Conway, Jr. (Co-Founder, Interim CEO & Co-Chairman Carlyle), Jim Zelter (Co-President Apollo Asset Management), Neil Shen (Founding & Managing Partner Sequoia China) and Nicolas Aguzin (CEO HKEX). The event is hosted by Hong Kong Monetary Authority (HKMA), and HKMA Chief Executive Eddie Yue announced plan to host the Summit again in 2023, coinciding with the 30th anniversary of HKMA. China property housing market has been under pressure. More info below
“ We Hope the Housing Market Can Achieve Soft Landing “
The People’s Bank of China (PBC) was established on December 1, 1948 based on the consolidation of the Huabei Bank, the Beihai Bank and the Xibei Farmer Bank. In September 1983, the State Council decided to have the PBC function as a central bank. The Law of the People’s Republic of China on the People’s Bank of China adopted on March 18, 1995 by the 3rd Plenum of the 8th National People’s Congress has since legally confirmed the PBC’s central bank status.
China Construction Bank Seizes China Evergrande Chairman Hui Ka Yan $90 Million Luxury Mansion in Hong Kong, Citic Took HK Headquarters & Oaktree Capital Took Yuen Long Land
3rd November 2022 – China Construction Bank had seized China Evergrande Chairman Hui Ka Yan $90 million (HKD 700 million) luxury mansion in Hong Kong (The Peak), with Citic taking over China Evergrande Hong Kong headquarter in September 2022 and Oaktree Capital Management taking over China Evergrande Yuen Long district land earlier in 2022. China Evergrande is one of China’s largest property developer and has more than $300 billion in debts. Earlier in October 2022, China Evergrande founder & billionaire Hui Ka Yan has put on sale London most expensive house for £200 million, having just bought the house 2 years ago in 2020 April for £210 Million. The £200 million house in London is a 20-bedroom 62,000 square feet mega-mansion in the prestigious Knightsbridge neighbourhood (London).
In late 2021, China Evergrande founder Hui Ya Kun had been pledging and selling $1.1 billion of his personal & company assets including 2 Gulfstream private jets, 2 Hong Kong luxury properties and personal investment portfolio to prevent a default of interest payment of its $300 billion debt. The 2 Gulfstream private jets were sold to American investors, one to Earth Air for $40 million and another one to Aviation Sales Associates for $15 million. China Evergrande is founded in 1996 by Hui Ka Yan (Xu Jiayin). In 2009, China Evergrande went public in Hong Kong. At one point, Hui Ka Yan had a personal fortune of more than $30 billion. In 2021, his personal fortune is estimated at around $7 billion to $11 billion.
China Property Watch: Worst-Case Projection of 6.4% Total Mortgage at Risks Amount to $356 Billion, Representing 2.5% of China GDP
4th August 2022 – In the worst-case scenario in the current China property mortgage crisis, S&P Global Ratings estimated that the total mortgage at risk amounted to 6.4% of total mortgages ($356 billion, CNY 2.4 trillion), representing around 2.5% of China total GDP ($14 trillion). Earlier in July 2022, property buyers & suppliers have or are starting movements to stop property payments for delayed projects, with the Chinese government, central bank & regulators stepping in with emergency meetings to ensure liquidity for banks and for banks to support financing for the completion of property projects. A week ago, it is reported China homebuyers have started a movement to stop paying monthly mortgages (housing loans) for delayed projects, with China property stocks & bonds prices declining. China largest banks including Agricultural Bank of China (ABC) and China Construction Bank & Industrial Bank (ICBC) have responded that the associated risks are controllable, and accounting for 0.012% of total mortgages (ABC, Agricultural Bank of China). Yicai: “Buyers in around 150 housing projects across 20 provincial-level regions have banded together to demand that developers restart building and that the houses are delivered within a reasonable period of time otherwise they will stop repaying their bank loans, according to the latest data. Most of these unfinished projects are in smaller second, third and fourth-tier cities were there is a glut of properties on the market.”