[berserk1010]

> Most of the unfinished buildings will be completed in 2-5 years.

Many things wrong with that statement. Chinese local governments are overloaded with debt - 12.6 TRILLION https://www.reuters.com/markets/asia/china-orders-local-gove.... National government has refused to supply local governments with more money, in fact it has limited some local governments to what they can build. Local Governments have zero incentives to add more inventory to an already bloated real estate supplies. A lot of these unfinished buildings were left unfinished for a number of years, is already left to ruin, and unsalvageable. Tofu dreg building qualities means it's easier to demolish these buildings.

[throwaway2037]

> overloaded with debt

As I understand, most of the debt issued by local gov'ts is RMB-denominated. The PBoC can easily assume (large) parts of this debt without large negative economic impacts. Other countries have done similar in the past by creating "bad banks" that are financed by the central gov't or central bank.

[ernst_klim]

> without large negative economic impacts

How could central bank finance such a debt without igniting the inflation? Especially in a country with already expensive money and pretty large interest rates.

[throwaway2037]

> How could central bank finance such a debt

Central banks can print money. And most countries, even developing ones, can support more money printing than people understand. I am not advocating for crazy money printing, but printing 5-10% of GDP for a single year to clean-up a big financial mess isn't so bad.

Did you know that Indonesia has an explicit monetary policy to monetize a certain portion of their national debt each year? The finance minister (Sri Mulyani) is well respected, so foreign bond buyers were not upset by it. It did not "ignite" inflation. Also, look at quantitative easing by US, UK, EU, and Japan.

[ernst_klim]

> Also, look at quantitative easing

Quantitative easing in US, UK, EU, and Japan happened during the economy balancing on the brink of deflation. I.e. when capital from the developing world was actively escaping into the developed world, when the developed economies were bathing in cheap capital and firms could borrow at zero or even negative percent, and the economy grew massively and required quantitative easing for simply avoid inflation.

We can see how money printing works when the economy isn't growing respectively, the inflation hits as it happened in EU, US and Japan now.

> Did you know that Indonesia has an explicit monetary policy to monetize a certain portion of their national debt each year?

No, I don't. The only sources I found tell the opposite.

https://www.thejakartapost.com/news/2020/05/06/no-need-for-u...