[dialogbox]

It does look like a Ponzi. Aren't there any regulations to prevent that?

It's pretty similar to Korea until the step 3 but we have some safeguards after that.

Instead of giving money directly to the development corp, we give it to a trust corp. And the dev corps can only use the money to build the building.

And if the dev can not meet the due date and if it is delayed more than 3 months, the contract can be cancelled and the owners can get the money back.

That very rarely happens because dev corps desperately meet the deadline regardless of the quality. That causes hell lot of another issues but that's totally different story.

It seems to me like there are many things missing in the Chinese real estate system. Or is it just because no one cares the regulations?

[ganyu]

It is because the people who do the regulations are the people who are regulated. It's like having a root user set up a SELinux policy for himself.

[netheril96]

There are regulations but badly designed (maybe intentionally). For an analogy to the Korean case, here the dev corps and trust corps and the government entities overseeing them are more often or not in collusion together.