This has net effect of banks receiving money from the federal government for taking loans, through interest payments. I could rant quite a bit about the lack of law and big money games. Sufficient to say, the US isn't behaving as a nation of laws applying to everyone equally.
Then there is China, issuing propaganda that they are a solid nation, with solid growth, and a spectacular economy. Hardly. I have blogged a few times on China, and the massive fraud games they are playing. China is much more opaque in the games they are playing compared to America, and the real estate boom/fraud/bubble makes America's look like an opening act.
Chinese by the millions are buying real estate, (you cannot own in china, its a 70 year term lease), as an investment. Many of the real estate is not even occupied, it is paper wealth. Sure there are monthly costs, but the increasing valuation is expected to cover those losses. There is no thought of a real estate collapse since the propaganda is believed, that the Chinese government will not allow any bubble to burst. That the upward spiral in real estate is never ending.
Further, for each piece of land bought, it is purchased from the CHINESE GOVERNMENT, since China is communist, the government owns everything. The purchase is a 70 year lease on the property, not ownership. Not that 70 years is close enough to matter anyway.
But the point is, the money goes right to the local government coffers, so there is a direct incentive to keep the boom going.
Chinese banks are centrally controlled through the government, perpetuating the funding.
It is a fraud competition, who falls first so that side can take the blame. There is very high stakes here, if China falls first, I would expect flight to US economics. If US falls first, China may be able to gain international economic ground as their facade is kept as the US falters.
Money as a tool is suppose to represent a work debt note, to be paid back. In these games the work will not be paid back, as the work was over paid for and fraudulent.
Bottom line, this is a game, that in the end, both will blame the other, and someone may get a little pissy. That is how trade wars or real wars start.