The Scary Solution to the Chinese Debt Crisis #Shorts | Economics Explained

The video discusses the unaffordability of housing in major Chinese cities compared to the US, highlighting Shenzhen's extreme housing cost relative to income. It attributes this to rampant property investment, where multiple generations save for a home deposit. In response, the Chinese government has proposed a property tax to curb real estate hoarding. Additionally, land in China is leased from the government, effectively imposing a long-term tax on property ownership.

How does the cost of housing in Shenzhen compare to the average household income?

• It is 5 times the average income.

• It is 10 times the average income.

• It is 20 times the average income.

• It is 46 times the average income.

What is a significant factor driving the high cost of housing in China?

• Government subsidies.

• High construction costs.

• Property investment frenzy.

• Lack of available land.

What strategy has the Chinese government proposed to address real estate hoarding?

• Increasing interest rates.

• Providing housing subsidies.

• Introducing a property tax.

• Reducing construction costs.

How long can land be rented from the government in China?

• 100 years

• 75 years

• 50 years

• 150 years

What is the implied annual tax on property in China due to land rental agreements?

• 5%

• 1%

• 0.5%

• 2%