So what caused China's mortgage crisis?

In August 2020, Xi Jinping issued his "three red lines" crackdown on property developers. Billed as much needed regulation, the three red lines said that developers had to

• hold enough cash on hand to meet liabilities (long-term debt bonds, short-term borrowing, and payments to suppliers)
• a 100% cap on net debt to equity, and
• a debt-to-asset ratio of 70%

This stuffed most developers - they couldn't borrow to pay their suppliers till they'd paid down existing debt. To raise cash to pay down debt, they sold homes off-plan to homebuyers. But the money raised was not enough to repay existing debt and pay suppliers to finish building the homes. Some developers started to default on their debts, the most high-profile being Evergrande. 20 developers have defaulted so far. Meanwhile building work halted, stressing out construction workers and suppliers.

As Chinese people found they were paying mortgages on homes that weren't finished because developers had run out of cash, they went on a mortgage strike. This in turn spread the pain to the banks that lent the mortgages.

The Chinese politburo on Thursday agreed a $30bn bailout fund to make cheap loans to developers so they can finish construction.

Of course none of it would have been necessary if Emperor Xi hadn't made his half-baked "reforms" in 2020.