The big problem for China is not the trade wars although this isn't helping.
The real problem for China is millions of people bought a second and third home from bank borrowing for speculation.
More people own a second home in China than people who own a first home.
The people that own 3 homes or more is only slightly lower than people that own one home.
Companies that built millions of homes and shopping centres that they cannot sell or lease out will have a cash flow problem.
One of the biggest investment companies in China cannot afford to pay its debts and is asking its own employees to lend it money.
HONG KONG — Just before payday, an email went out to employees from top executives: Give us your money, and we’ll make it worth your while.
It was one of many pitches by HNA Group, a Chinese conglomerate struggling under an estimated $90 billion in debt accumulated during a global shopping spree that included buying stakes in multinationals like Hilton Hotels and Deutsche Bank.
The company, in an email, advertised an “employee treasure” product with an 8.5 percent return if workers handed over $1,500. A similar one dangled 9 percent. A third mentioned a return as high as 40 percent if employees ponied up $15,000.
These pitches, more than a dozen of which were reviewed by The New York Times, were not part of an employee stock program. Instead, they appear to be high interest loans, with the company as borrower and its workers as lenders.
HNA’s overtures to its employees come at a difficult time for many of China’s biggest dealmakers. The company is among a group of large Chinese firms chastened by the government for making splashy overseas purchases of hotels, movie theaters and film production companies. The resulting debt among the aggressive buyers got so big that Beijing saw it as a threat to the broader economy.
HNA is facing its own financial pressures. The conglomerate has seen its borrowing costs rise sharply on the global bond market in recent months, an indication that some investors are increasingly worried about the company’s ability to pay its debts. Seven public companies under the umbrella of HNA have suspended trading of their stock, suggesting that big announcements that could affect key businesses are in the works. The company is also starting to sell assets.