The Silver Lining in the Red Giant: China’s Residential Mortgage Laws Promote Temperance Among the Surging Middle Class

Clayton D. LaForge *

The nascent Chinese middle class bypassed the “Great Recession” despite China’s global infrastructure investments suffering dire consequences. Wall Street’s toxic tranches stacked atop one another in collateralized debt obligations seemingly comprised the most epidemic and obscure entity in financial history. Media outlets reported China’s second largest commercial bank held over nine billion dollars in U.S. subprime mortgage-backed securities, yet China’s gross domestic product surged as usual by 8.7% in 2009. Members of the middle class marched on, renovating the apartment and following the latest trends.

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