Analysis | How Wealth Products Helped Inflate China Real Estate – The Washington Post

Almost all major private developers turned to offering WMPs as a way to raise capital after the government, worried about a growing debt bomb, tightened access to traditional bank loans for them at the end of 2020. (Guo Shuqing, the head of the banking regulator, a year ago called real estate “the biggest gray rhino” for China’s financial stability — referring to a large yet overlooked threat.) They were sold not only to wealthy individuals but also to their homebuyers and even their own employees, touting returns above 6%. Unlike those offered by banks, the WMPs issued by developers are unregulated.