Reborn as Zhao Ruilong of Handong, I will defy fate.

Chapter 244 Financial Games You Shouldn't Play! A person should know their own limitations!

"You dare to invest 10 billion?"

"You don't even think before you start bragging."

"If you could come up with 10 billion, would you still need to play high-tech games with President Zhao?"

After giving Qiao Wenli a scathing rebuke, he didn't forget to roll his eyes.

Zheng Xinrong scoffed, "I was just giving an example. I can't come up with 10 billion, but investing 2 or 3 billion is no problem."

After saying that, Zheng Xinrong sat down on the sofa.

He took a cigar out of his bag and began skillfully cutting hair.

"Hey you two, stop standing there like idiots! Come over and try my new cigars!"

"One stick costs two thousand eight hundred! Hurry up and try it, and see if it's worth the price!"

"Two thousand eight? Ha, you didn't get scammed, did you?"

Qiao Wenli set off immediately.

Drinking coffee and smoking cigars are also his favorite things.

Soon the three of them leaned back on the sofa, puffing on cigarettes and savoring the smoke.

He Zhimiao glanced at Qiao Wenli and Zheng Xinrong, who were puffing away like their mothers were smoking opium.

"By the way, Old Joe, how's your cousin who's in real estate on Longnan Island doing lately?"

"What else can he do? Half-dead, that's it!"

After taking a puff of his cigar, Qiao Wenli sneered:

"I advised him to quit while he was ahead, but he wouldn't listen. Now he deserves his bad luck!"

Upon hearing this, Zheng Xinrong scoffed:

"You can't entirely blame him!"

"In that crazy era, the idea of ​​100,000 troops descending on Longnan and major conglomerates scrambling for territory was no joke!"

"With house prices rising by two or three hundred a day, if you take out a loan to buy a building, you can make tens of millions in profit by reselling it in a few months. Who could resist that?"

Qiao Wenli sighed and shook his head.

Ten years ago, the real estate speculation on Longnan Island was truly insane.

Everyone went crazy, buying land, building houses, and scrambling to buy apartments.

Some real estate companies haven't even bought a single plot of land yet; the companies have only just been established, and countless people are already snapping up insider shares with their money.

The reason everyone was so crazy was because a large number of speculators flooded into the island, and the special economic zone's credit policy was particularly lenient at the time, making it easy to get loans.

Ever since.

Many people not only sold their possessions and scraped together money, but also took out loans like crazy to leverage up real estate speculation.

At its most insane, people dared to borrow at 100% interest rates.

A building that was not even finished changed hands seventeen times.

Amid this frenzied speculation, local housing prices skyrocketed from 1400 yuan per square meter to 5000 yuan per square meter.

The price of residential land, which was originally several hundred thousand yuan per mu, was inexplicably driven up to nearly seven million yuan per mu.

The annual real estate investment amount is nearly 10 billion yuan!

In addition, 40% of the local government's fiscal revenue comes from the real estate industry!

At its peak, an island with a population of several million had nearly ten thousand real estate companies.

Many people not only borrowed money recklessly, but also engaged in fraudulent activities such as "selling the same property multiple times."

With the real estate industry spiraling out of control, the top leadership has begun to intervene and tighten credit.

In 1993, more than 10 million square meters of buildings became unfinished projects.

In any city, there are dozens or even hundreds of unfinished housing projects.

A large number of real estate companies went bankrupt, and countless property speculators fled.

Not only have the non-performing loan ratios of major banks skyrocketed, but many established securities firms and trust investment companies have also suffered heavy losses.

Qiao Wenli's cousin had already made a lot of money during the frenzy of real estate speculation.

But he was far too greedy, and he didn't know when to stop.

When the real estate market collapses and credit policies tighten, even banks will face a frenzied run on deposits.

Now you want to escape?

Where else can I escape to?

In just a few years, my cousin not only lost all the money he had earned, but also lost a lot of money.

Even though the local government has introduced a number of policies to deal with a large number of unfinished buildings through tax reductions and financial subsidies, the results have been minimal.

After all, it's just a small island with a small population. Even if multiple parties work together to complete the unfinished building, not many people will buy it!

After 2000, with strong support from the state, the local government, based on existing policies, reclaimed abandoned land and demolished unfinished buildings, which finally brought about some improvement in the local real estate industry.

But Qiao Wenli's cousin, who was deeply trapped, was still half-dead, basically just barely surviving.

“My cousin wouldn’t listen to advice and still hasn’t gotten out of this mess. He deserves it.”

"And all these years, our Dragon Kingdom has adopted a conservative credit policy towards the real estate industry, thanks to what they did back then!"

"If they hadn't gone too far with their real estate speculation in Longnan Island, creating such a mess, why would it be so difficult to get a loan now?"

"Handong is vigorously developing high-tech industries, attracting a large influx of people. The housing prices have just skyrocketed, and it has immediately attracted heavy-handed regulation. Obviously, Handong is afraid of becoming the next Longnan!"

Zheng Xinrong turned his head and glanced at Qiao Wenli.

"Where you sit determines your perspective, and your interests determine your stance!"

"As a real estate tycoon and the king of Tianhai land, you must be hoping that the credit policy for the real estate industry will be more relaxed and the regulatory control will be more lenient."

Qiao Wenli gave a cold laugh.

"Old Zheng, you've got it exactly backwards."

"If credit is loosened and policies are relaxed, do you know what will happen?"

"If that's the case, even if it doesn't turn into a real estate bubble as quickly as it did on Longlan Island ten years ago, it would still be extremely unfair to ordinary people."

"Because at that time, the wealthy will no longer be playing with how much money they have on hand, but rather how much they can leverage through financial instruments such as business loans, credit loans, and asset securitization."

"Local governments, relying on land revenue, will inevitably form a mutually beneficial symbiotic relationship with banks and developers, continuously driving up land and housing prices so that all three parties can profit, while ordinary people suffer!"

After taking a puff of his cigar, Qiao Wenli continued:

"Looking at the history of human development, and referring to developed Western countries..."

"As a country's industrialization continues to improve, urbanization is an inevitable trend, and our Dragon Country is no exception."

"In the countryside, you toil in the fields all year round, but you can't earn much money. But if you go to the city to work or do business, you have better and more opportunities to make money. If you were a farmer, what would you choose?"

"And those teenagers who have read books and received an education, who come to the city to study and make a living, how many of them are willing to go back to the countryside in order to live a better life?"

"Furthermore, the traditional Chinese mindset that 'a house is a home' has led countless people to believe that once they move to the city, only by buying a house can they be considered to have a home in the city, and only by buying a house can they be considered to be doing well!"

"Moreover, ordinary people are easily fooled. They can haggle over a penny or two in the market, but they won't even blink an eye when it comes to buying a house, emptying their savings and taking on a mortgage, because they think buying a house is not consumption, but an investment!"

"They have no idea that housing prices can't rise forever, and that houses will age over time. They also can't understand that you can live a normal life by renting. Using healthcare and education to hold housing hostage is just plain thuggish!"

Zheng Xinrong nodded repeatedly.

"Yes, if you don't buy a house in the city, it's hard to say you're doing well. Besides, without a house, how many mothers-in-law would be willing to marry their daughters off?"

"Therefore, we Chinese people must not ignite their desire to buy houses, otherwise once it is lit, it will be uncontrollable and create an unknown amount of real estate bubble!"

Qiao Wenli smiled and said, "Just from the trend of urbanization and the people's need for a peaceful and prosperous life, we can tell that real estate is one of the essential industries in our Dragon Country."

"Considering that real estate can bring land revenue, drive the development of many industries such as building materials, construction machinery, furniture and home appliances, and provide earning opportunities for countless migrant workers, it is even more necessary to do it well."

"But there have been many lessons learned both at home and abroad. Real estate cannot be developed as a pillar industry of the national economy, otherwise big problems will arise. Take, for example, Japan, which is just across the sea from us. Isn't it the most direct negative example?"

Zheng Xinrong and He Zhimiao both nodded in agreement.

As the adopted son of the United States, Japan is one of the few developed countries in the Asia-Pacific region.

After World War II, thanks to investment from the United States and its own efforts to develop foreign trade exports, Sakura's economy took off rapidly.

In addition, its limited land area and dense population make it even more conducive to the vigorous development of the real estate industry.

In order to sell more land, real estate developers to sell more houses, and banks to lend more money, the three parties quickly colluded to continuously drive up housing and land prices.

The continued rise in housing prices has also fueled people's enthusiasm for investment and purchasing, with everyone rushing to buy houses, fearing that they might buy too late or too little.

Many people believe that housing prices are unlikely to fall and will continue to rise.

The continued growth in land sales revenue provided the government with more funds to invest in infrastructure, improve people's livelihoods, and strengthen national defense. Banks also converted a large amount of savings into mortgages, earning interest even while doing nothing.

Moreover, with the continuous rise in housing prices, real estate developers and their suppliers, as well as a large number of laborers, have all made money. Homeowners also seem to have made money, even if it's just paper wealth that can't necessarily be cashed out.

In this real estate economic frenzy, it seems that no one has suffered losses; everyone has benefited.

The national economy of Sakura has also continued to rise, driven by the real estate sector.

So much so that some people once made a bold statement.

Selling Eastwell would allow you to buy the entire United States!

however……

There is no such thing as a perfect good thing in the world.

There is no miracle of flying by stepping on your right foot with your left.

Japan, a small country with cherry blossoms, has a limited population, and naturally, the number of people who can afford to buy a house is also limited.

When all kinds of advertising and inducements fail to work, and the potential for home purchases gradually dries up.

In order to stimulate the economy and boost domestic demand.

Japan has begun a series of economic stimulus measures.

Lower mortgage rates, lower down payment ratios, lifting purchase restrictions...

These measures, besides rescuing the market, also aim to reduce the debt of financial institutions by using the debt of the public, thereby mitigating systemic financial risks.

This forces more people to empty their savings and take on mortgages, becoming providers of the financial system and overdrawing their hard-earned money for the next two or three decades to buy ordinary properties that depreciate year after year.

When all kinds of regulatory measures fail, they simply start to inject massive amounts of money into the economy, but this money ends up in the pockets of the rich.

They create paper wealth by driving up the prices of luxury homes in the core social circles, obtain higher loan amounts from banks, acquire more luxury homes, and thus form a resource monopoly.

The rich can play around without worry, because they are not afraid of a drop in housing prices at all. The value of the mortgaged luxury homes is assessed by the banks, and the banks would never dare to let the value of luxury homes depreciate easily.

Besides their residential function, luxury homes also possess investment value, becoming units of capital accounting, prime collateral in the eyes of banks, tax revenue machines in the eyes of the government, and passports to the wealthy elite.

When the wealthy use leveraged funds to drive up the prices of luxury homes, ordinary people who cannot afford them are gradually squeezed out of the core areas and forced to take over ordinary suburban properties, which continue to depreciate.

When financial rules assume that people with more assets have better credit, it's a form of legal robbery.

The rich dilute their debts with inflation while simultaneously exploiting the poor with their assets. Whether the poor buy a house or not, their wealth is being invisibly plundered.

When all kinds of easing policies and financial measures cease to be effective.

The real estate bubble in Sakura has finally stopped inflating.

No one dares to burst the bubble. Such high housing prices have to be resolved through continuous inflation, which will naturally put pressure on and harm the lower classes.

Even if they grit their teeth and empty their savings, they still can't afford a house, can't afford the mortgage, and are tormented by continuously rising prices.

More and more people from the lower classes are giving up on their struggles, choosing not to date, get married, or have children.

Regardless of inflation, we're already cutting back on spending wherever possible.

As more and more people at the grassroots level adopt such thoughts and behaviors.

When the real estate market is sluggish and domestic consumption is weak, foreign trade exports are also unable to effectively drive economic growth.

The economy of the entire Sakura Country began to decline.

Despite its apparent prosperity and development, the area is actually plagued by a vast wealth gap and immense pressure to survive.

Some people party every night, living a life of extravagance and debauchery, while others, even in their seventies, still have to work hard.

Such short-sighted prosperity, which is like drinking poison to quench thirst and mortgaging the future, is certainly not what the Dragon Kingdom wants.

The painful lesson of the real estate bubble on Longnan Island was learned just ten years ago.

Japan, with its sluggish economy and rapidly declining population, is just across the sea.

Intelligent and farsighted leaders naturally do not want to repeat the same mistakes.

Therefore, we strongly support Handong in upgrading and transforming its industries, developing a high-quality economy, and strictly controlling the real estate sector...

Credit policies are also being adjusted in other provinces and cities.

This will make it harder for real estate developers to acquire land and make it more difficult for speculators to obtain loans.

Without a continuous influx of large sums of money into the real estate sector, housing prices naturally cannot continue to rise.

Nowadays.

Zhao Ruilong held a closed-door meeting with Xiao Jinhua from Yanjing, as well as wealthy business families from Dongguang, Haomen, and Hong Kong.

This is undoubtedly a very clear signal for the wealthy.

China does not allow speculative investment in real estate, but encourages investment in high technology!

The future belongs to high technology and a high-quality economy, not real estate or low-value traditional industries!

It is important for people to know themselves!

Qiao Wenli, Zheng Xinrong, and He Zhimiao were present, along with several other wealthy individuals who arrived later.

Those who have reached their social class and wealth are certainly not fools; they have all understood the signal.

Everyone knows that transformation and upgrading are inevitable, and the earlier you enter the market, the more money you can make, and you won't be eliminated by the times.

only……

Capital comes in different sizes, and the rich also come in different levels.

They don't have a net worth of tens of billions, or a sufficiently powerful influence.

Of course, they were not qualified to be invited to the closed-door meeting.

The only option is to arrive uninvited and then take the initiative to show goodwill after the banquet begins.

Maybe if you're shameless enough, you can get in and get a piece of the pie.

Time passes slowly.

As night falls and the city lights begin to twinkle.

The dazzling lights adorn the high-rise buildings, showcasing the bustling and dreamlike night scene of the Bund.

Zheng Xinrong and the others tidied their clothes and dressed themselves up in high spirits.

Then, one by one, they raised their glasses and headed to the banquet hall with smiles on their faces.

Their steps were light and excited, as if being even a half-beat slower would mean missing out on a brand new era.

"Hello, Mr. Zhao, my name is Zheng Xinrong!"

"Hello, Mr. Zhao, my name is He Zhimiao!"

"Hello, Mr. Zhao. My name is Qiao Wenli. It is my great honor to meet you!"

……