40 trillion real estate bonds and 60 trillion urban investment bonds

Mondo Finance Updated on 2024-01-31

One person borrowed 10010,000, consumption squandered out, another person, borrowed 100Wan, bought a house. Who is more reliable and more solvent?The answer is clear at a glance.

Let me tell you a paragraph first:

A well-known real estate tycoon told a joke about China's real estate industry at the company's annual meeting, to the effect that it was as follows:

I spent 3 billion yuan to get a piece of land, asked the bank for a loan, found a builder to build a house, and worked hard to build a house and sell it. A total of 6 billion was sold, and 1 billion was earned after deducting various costs. Looks like a good profit. And then the business has to get on. Then go and get the land. At a glance, I took another piece of land worth 3 billion that year, and smashed all the 6 billion I received from selling the house into it, but I couldn't get it. I just don't understand. First, do you think I made money or lost money?Second, what I worked so hard for, in the end I didn't do anything, I didn't build a house and directly hoarded land, but I made more money. ”

China's real estate tycoons are all reckless heroes who start from scratch, and they are not old enough in this regard. In the ** era of soaring housing prices, it is indeed better to build a house and sell a house than to hoard land.

Hong Kong's Li Superman Li Ka-shing is deeply aware of this.

In 2021, Li Ka-shing sold an office building in Shanghai for billions. The building was purchased by Li Ka-shing in 2005. The plan is to build an office building, which has not yet opened when it is sold in 2021. Another project in Shanghai, which was acquired in 2004 and sold in 2016, was not finished. The most powerful is a piece of land in Beijing, which was acquired in 2001 and has not yet started.

Domestic real estate developers pursue high turnover, which is better than Li Chaoren's hoarding of land for more than ten years.

Of course, the introduction of real estate developers is to build houses, and they hate land hoarding. Later, ** also learned to be obedient, and when taking the land, it was stipulated that it would be forcibly repossessed if it was not developed for a long time. Li Superman's hoarding, that is, bullying ** in the early years, didn't understand it before, and was just confused by Superman's aura.

Real estate tycoons are like gamblers at the table. The winning chips are doubled to continue betting. If you don't leave the table, the stacks of chips will be higher and higher, just the riches on the table, and you may lose them back at any time. But there are a few ambitious bigwigs who are willing to leave the glittering table.

There are only a few who can make up their minds to leave the table.

Real estate developers always feel that the dividends of land price are all earned by selling land to the local government. Actually, it's not quite.

Place **, in fact, is also on the table, place **, it is more difficult to leave this table.

China's local finance is very unique, with two sets of fiscal systems. One is asset-light and the other is asset-heavy.

Asset-light is the collection of taxes. Apple appstore, everyone pays on it, and Apple takes 30%, which is known as the Apple tax. Taxation is asset-light, relying on ecology to collect taxes. I opened this mountain, I planted this tree, if you want to pass through here, leave the money to buy the road. The apple tax is the money to buy the road. There is no need to be asset-heavy to collect taxes.

In 2022, a bunch of people said that the epidemic prevention caused a financial crisis. This sentence is three points true and seven points wrong. The asset-light part, in fact, is not a crisis, and it is basically normal.

From January to November 2022, the general public budget revenue was 1855 trillion yuan, 88 of the budget at the beginning of the year26%, and the expenditure is 8521%。

Revenues are indeed lagging behind schedule, and from January to November, the country's general public budget revenue fell by 3% year-on-year. But this is because in the second quarter of 2022, during the epidemic in Shanghai, in order to promote the economy, interest-free financial support was provided to enterprises in the form of additional tax refunds. The tax refund is directly deducted from the income. This amount by the end of November, is 23 trillion yuan. Removing the 21-year-old and 22-year-old additional tax refunds, there are also close to 17 trillion yuan. From January to November, the cumulative increase was 61%, that's a decent growth rate. After deducting the tax refund, 96% of the annual budget has been completed by the end of November.

On a monthly basis, in April, the general public budget revenue of the month increased by 40% year-on-year due to tax refunds. However, the tax refund is not a tax reduction, but only a future tax refund paid to the enterprise in advance, which is equivalent to an interest-free loan, and the enterprise will make up for it later. Since August, general public budget revenues have begun to return to positive, with a year-on-year increase of 16% in October and a 25% year-on-year increase in November.

In fact, there is no problem with the asset-light part and the general public budget revenue, which is mainly based on taxes. General public budget expenditures, ** are also trying to control, in December 22, it should not be like in December 21, ** spending money with all its might.

What went wrong?It is another set of local fiscal system unique to China, which is an asset-heavy part. The so-called "business city".

This account is **sex**. The main part of the sex is the land transfer fee, and the expenses related to the land transfer income.

In 2021, the deficit for the year was 16 trillion. In the first half of 2022, the deficit will be 27 trillion, at the end of November, the deficit was 355 trillion.

The main part of local income is the land transfer fee. In 2021, 94 trillion total revenue, 85 trillion is the land transfer fee. From January to November this year, only 51 trillion. It is estimated that more than 30% of the whole year, less than 3 trillion.

That's more troublesome.

This asset-heavy local fiscal system is the upstream of the real estate industry, which is similar to the real estate industry.

Real estate developers take land, build houses, decorate, and sell houses.

Local ** land acquisition, demolition compensation, seven links and one leveling, infrastructure construction, road and bridge repair, transportation, improve land value, and finally become mature land. Bidding, auction and listing.

Real estate developers build houses and sell houses, and local ** land acquisition infrastructure sells land. The real estate developer sold the house and continued to acquire the land. The local government sold the land and continued to requisition and demolish the land for construction. The money from the sale of old land continues to be thrown into new land.

Real estate developers make money on the books, but they don't actually make money, and the profits are accounting profits.

Judging from the numbers, it seems that the first land sale does not make any money, and the money earned from the sale of land continues to be invested in the development of new land. Of course, the local ** should not make money in the first place, and after selling the land, it must continue to "run the city" and develop the economy.

Who did you get the money for the sale of the land?After 2015, the Ministry of Finance no longer publishes the details of expenditures related to land transfer fees. In 2015, more than 50% of the compensation was for demolition, plus miscellaneous and other things, and the direct land cost accounted for 70-80%.

The demolition turned out to take the lion's share of the real estate economy. No wonder there is always a legend of "dismantling the second generation" in the world. Of course, this part of the income will also enter the monetary cycle. Eventually, it becomes an integral part of economic development. Demolition expenditure is also linked to housing prices, and when housing prices rise, demolition costs must also rise.

Investing heavily in assets requires too much capital, and there is no money. The real estate developer has no money, and the local ** has no money. Who don't have the money to find?Find a bank.

Real estate developers have no money for development, bank loans, pre-sale funds, and project advances. In the end, a 40 trillion real estate developer debt was created. There are not so many interest-bearing liabilities, about 16 trillion, contract liabilities about 16 trillion, and 8 trillion bill liabilities and accounts payable.

There is no money in the local **, and the local ** is not free to borrow money, **all kinds of restrictions. You borrow debts, and I take the blame, this can't work. China is not like the United States. U.S. local** can go bankrupt on its own. The federation ** glanced at it and said something about me. The creditors can only go back to their own homes to find their own mothers. Later, there will be a lawsuit, and the creditor will consider himself unlucky if he loses money.

China does not allow local governments to borrow money at will, but there are countermeasures under the policy, and the borrowing is not free, and the enterprise borrows. So, the local ** made a thing called Chengtou. Chengtou borrowed money to develop land for construction, and the local government sold the land and gave the money to Chengtou to repay the debt.

Messed around and made a 60Trillions of urban investment bonds.

In the ** era of real estate, everyone is making great progress. Housing prices are always rising, and the drums and flowers are not stopped. ** Running the city, constantly developing the land, the real estate dealer waving the checkbook, creating one land king after another in the auction. ** Ringing, dancing non-stop. The epidemic in 2020 did not interrupt either. In those days, real estate tycoons were regulars on the list of the richest people and shining corporate stars.

However, in 2022, ** stopped all at once. The dancing real estate developers were at a loss and were the first to enter the cold winter.

Ordinary people don't buy houses anymore. The flow of funds is not moving, and the cash flow cannot be transferred. But the debt has to be paid. Some contract liabilities have no interest, and interest-bearing liabilities are not a joke. If you sell one year late, you will have one more year of interest. For real estate companies, interest is not a small amount of money, and Evergrande's interest expense for a year is much higher than its profit for a year.

Real estate developers, in fact, have assets, even Evergrande, the books are not insolvent, 24 trillion in assets, 2 trillion in liabilities. But there is no cash flow, and it can't be turned.

Real estate developers have entered a cold winter. There is no money to buy land.

As the upstream of real estate developers, the asset-heavy business of the local ** "operating the city" has naturally entered a cold winter.

In 2022, the financial problem of China's local ** is not the asset-light part of tax collection, but the asset-heavy part of land acquisition and land sales. The impact of epidemic prevention on the financial situation is there, but it is not large, and it can be completely survived.

The real problem is that the real estate industry can't play the drums and flowers, and the place is the best".operating the city".It's also struggling.

The real estate winter has led to problems in land finance, which can be seen by anyone with a discerning eye. The problem must be acknowledged and a way to solve it. But another group of people on the Internet began to talk crookedly, singing about the debt overpower, China

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