If you cheat, money will follow

Rongzhou.

"Qinghe, how's the situation going?" Chang Xueqin was talking to Yang Qinghe in the office.

"Secretary, the situation is much better than we expected." Yang Qinghe took out a form from the document bag and handed it to Chang Xueqin.

When Yang Qinghe took office in Rongzhou, his position was deputy secretary-general of Municipal W.

Now, his position has been adjusted to deputy mayor, in charge of urban construction.

The urban construction entrance is a very important section in any city.

Chang Xueqin doesn't trust other people.

"It's not bad. Currently, a total of 8 real estate projects in the city are facing the risk of financial rupture." Yang Qinghe said:

"Among them, the assets of five properties can cover the debts and still have some surplus, while the other three properties are insolvent."

"But the assets of the other five properties can cover the debts of these three properties."

"Overall, the risks are controllable."

Chang Xueqin went to Rongzhou and has been paying close attention to the real estate work.

He has always been highly vigilant about the high turnover and high leverage model of the real estate industry.

However, we cannot simply transplant the basic practices of Changning City. After all, the markets in the two places are different in scale, complexity, and importance.

Acting rashly will only bring the risk of disposal risks to Rongzhou.

Under this premise, we can only adopt some "stupid" methods.

The first is to directly interview the major banks in Rongzhou and require that entry and exit are not allowed before the completion and delivery of the capital project of Rongzhou Real Estate Company.

Any outflow of funds will be held accountable.

The second is to require regulatory authorities to conduct one-to-one tracking of real estate sales. If any abnormal fluctuations in pre-sale prices are found, pre-sales will be stopped directly.

The third is to require the construction department to track the progress of real estate construction in real time. If the construction progress of the real estate is slow or abnormal, pre-sales will be stopped.

These are the three points Chang Xueqin said personally at the city-wide real estate work symposium in Rongzhou.

Provincial heads of major banks were also required to sign on-site on the agreement.

Provincial heads of major banks were somewhat resistant, and most of them signed without hesitation.

Who makes someone who is a HB committee member speak more effectively than the boss of his own company?

Now, many provincial heads of banks will admire from the bottom of their hearts: Awesome! Really awesome!

There is a big situation and background here.

In order to respond to the epidemic and keep the economy running, North America issued US$5 trillion in debt during the epidemic.

These huge funds further promote inflation in North America, and the CPI index remains high.

As the epidemic is gradually stabilized and controlled, restarting the economy is imperative and a top priority.

The Federal Reserve has publicly stated many times that it will enter the channel of raising interest rates by the end of the year or in the first quarter of next year.

It is claimed that it is to curb inflation and control price levels within a reasonable range.

However, based on the uniqueness of the US dollar as a global currency, they obviously have more considerations and plans.

That is, through the dollar tide, global capital will return to the dollar, thereby harvesting the world and making up for the economic losses caused by the epidemic.

Raising interest rates will inevitably lead to interest rate arbitrage, currency depreciation, capital outflows, and severe financial shocks.

Some economically fragile countries have already been harvested by the US dollar in the past few years and can no longer reap it.

Many countries have accumulated high foreign debt and their stock markets have collapsed (look at how Vietnam, which many experts touted, has been cut into).

So the purpose of this round of interest rate hikes is obviously one, and they will never give up.

Only China can make up for the huge foreign debt of US$34 trillion.

You know, the direct consequence of raising interest rates is an increase in debt interest.

They would rather bear the pressure of high interest rates than raise interest rates, and their goals are not small.

One of them is to boost domestic real estate through continuous interest rate hikes.

In the face of rising interest rates, which will lead to the collapse of Mount Tai, China is slowing down expectations of economic overheating and resolutely controlling the excessive prosperity of real estate.

Through the three red lines, we will proactively reduce debt, lower the temperature, and squeeze bubbles.

This forces real estate companies to take the initiative to reduce debt, scale, and temperature.

Avoid being cut off from capital flow when the market is at a high level and causing a passive collapse.

The three red lines are the three standards put forward by regulators during interviews with some real estate companies a few months ago:

First, the asset-liability ratio is greater than 70% after excluding advance receipts;

Second, the net debt ratio is greater than 100%;

Third, the advanced short-term debt ratio is less than 1.

If a real estate company steps on the three red lines, it will be a red level, and the scale of interest-bearing liabilities shall not increase;

Real estate companies that meet the two red lines are in the orange tier, and the annual growth rate of interest-bearing liabilities must not exceed 5%;

Real estate companies that hit a red line are in the yellow bracket, and the annual growth rate of interest-bearing liabilities must not exceed 10%;

Real estate companies that have not crossed any of the red lines are in the green bracket, and the annual growth rate of interest-bearing liabilities can be relaxed to 15%.

This accelerating policy aims to target listed real estate companies, requiring them to reduce their scale, reduce their debt, and prepare for a rainy day.

The actual effect is to cover the entire industry, completely changing the game rules of the entire industry, and the era of high-leverage expansion has come to an end.

Regardless of whether it is a listed real estate company or not, banks will treat it prudently whether it steps on the three red lines.

The entire industry will face a shortage of money, and the entire industry will take a sharp turn and enter a downward channel.

A shuffle in a sense.

"If you can balance assets and debts, many tasks will be easy to do. But you can't be careless. You need to follow closely and take precautions." Chang Xueqin said after listening to Yang Qinghe's introduction.

"Understood, I have been following this matter." Yang Qinghe said:

"However, those three insolvent properties still experienced capital outflows."

"Oh? What's going on? Hasn't the control been arranged in advance?" Chang Xueqin asked.

"After investigation, it was found that three real estate developers colluded with bank insiders to withdraw the funds in advance." Yang Qinghe explained:

"Two of the properties are relatively good, but the funds have flowed out to other properties outside the province. In one property, the funds have been withdrawn overseas, and the actual controller of the company has absconded."

"This is so shameless. What does the bank say?" Chang Xueqin slapped the table hard.

"They said they were reporting it to the headquarters and hoped to recover it," Yang Qinghe said helplessly.

"Hey, you are evading responsibility and perfunctory." Chang Xueqin said sternly:

"They must bear this responsibility."

"I will coordinate this matter, Qinghe. You must do the following things for these 8 properties."

"The first is to make emergency plans one-on-one. Each real estate city has two teams and a team of people to catch it to the end."

"The second is to do judicial preservation in advance. The assets of these eight real estates must be preserved in a timely manner and not to be interfered by judicial departments outside the region."

"I estimate that this matter will not be short-lived and will cover a wide range of areas. There will inevitably be judicial crossover between regions. We must take precautions."

"The third is to do a good job of asset inventory. Package the assets of 8 projects into one project, and use the best to help the poor to achieve the balance of assets and liabilities to the greatest extent."

"This matter needs to be entrusted to a professional accounting firm, and our staff lacks professional capabilities."

"The last thing is..." Chang Xueqin paused for a moment and continued:

"To support the government, we must have a plan and be mentally prepared for this."