The risky game China´s real estate sector is playing

China is in the middle of a economic crisis, the fear of a financial crisis is growing.
The problems are primarly rooted in the highly indebted real estate sector which contributes far more to China’s gross domestic product than in most other industrialized countries, around 30% is generated there. Suprisingly, the real estate prices started to collapse due to a risky game many people, who are involved in the sector, played, which is as followed: provinces sell land to real estate developers, who then set up massive construction projects – financed with loans granted by special purpose vehicles set up by the provinces. As a consequence, people’s private debts rose as well as the debt of the project developers and the procinves are unable to grant more loans.
The Chinese government tries to work against that but without much hope.