A report from the Wall Street Journal on China. "On a recent winter workday, investors and representatives from private fund companies in Shanghai and elsewhere descended on Sandu, a county in the deep south where tens of thousands of locals live on less than a dollar a day. After taxi rides from the high-speed rail station that took them past incomplete buildings, they sat in government offices, demanding repayment."

"'We sympathize with you investors,' Jian Shiwei, deputy general manager of a Sandu government-backed investment company that borrowed hundreds of millions of yuan to develop the area. 'But there’s no money right now.'"

"The standoff in Sandu is a microcosm of China’s mounting debt problem. Across the country, local governments and their more than 2,000 financing companies have run up trillions of dollars of debt to borrow and build their way to prosperity, tapping into ready financing from well-off investors chasing higher returns."

"Now the bills are coming due, and China’s slowing economy, curbs by Beijing on risky financing—and the massive scale of borrowing—are plaguing repayment and leaving some investors in limbo."

"'Sandu has its problems, but we can’t blame it,' said Jiang Xiaqiu, a factory owner and investor who bought 1.6 million yuan of Sandu’s debt via a private fund in Beijing, with an advertised 9% annual return. 'It’s the whole financial system and how poorly regulated the private fund industry has been.'"

"With courts lacking the power to enforce judgments on governments or state-backed companies, Ms. Jiang and other investors knew they would have to confront Sandu officials to get repaid, and started investigating the county’s finances."

"Some were shocked to find how poor Sandu is. They were also stunned by the scale of construction in Sandu and how much lay incomplete. Some of them visited an abandoned outdoor stadium, an Olympic-scale sports center with a horse-racing track, and a building that looked like an unfinished Roman Colosseum with concentric circles of cement arches. At a sprawling hotel, amphitheater and indoor basketball complex that was collecting dirt and rain, construction workers complained about not being paid."

"Liu Min, a private fund manager from Shanghai in a white overcoat carrying a Louis Vuitton handbag, had raised millions of yuan for Sandu by selling its debt to high-net-worth clients. After a futile meeting with two lower-level officials, she went to the office of Sandu’s party secretary. Getting no clear answer, she left town."

"Days later, a 500,000-yuan ($74,400) transfer came through, followed by 700,000 yuan in January, making up for her overdue interest. As for 20 million yuan in principal her company is due this March, she expects to be forced into a delayed repayment plan. 'I guess they’ll want us to talk to our clients about an extension,' she said. 'They really don’t have the money.'"

From ABC News in Australia. "In the heady days of the property boom, as big city house prices jumped ahead in leaps and bounds, investors reigned supreme, swatting away first home buyers with their superior purchasing power."

"It was a win-win for the investing class. They had willing banks and favourable tax laws working for them, pumping up property prices and capital gains in a virtuous circle. According to property investor Michael Ilieff, who arrived in Australia as a Bulgarian refugee almost 30 years ago with $8 in his pocket, the tables have well and truly turned."

"A combination of hard work, negative gearing and interest-only borrowing helped Mr Ilieff build a life through property, but right now his investment record spanning decades counts for nothing."

"He wants Westpac to extend his interest-only loan on a property bought well before the Sydney and Melbourne property boom took off. Even with prices falling, the property is worth much more than he bought it for, but the bank is treating him like a newcomer."

"'Everyone (investors) are suffering from that,' he told The Business. 'They really make it hard to borrow money. It's ridiculous there's just a blanket formula and no flexibility. I'm not sure how you can run the property market or anything to do with the economy if the banks continue to be this strict.'"

"But the biggest risk to investors, according to CoreLogic, is falling prices. Investors will no longer be able to ride a wave of capital gains. CoreLogic's head of research, Tim Lawless, said property prices will continue to fall through 2019 and possibly into 2020. In Sydney they are already down more than 11 per cent."

"'It's a bit of a perfect storm in many ways,' he said. 'Rental yields are beginning to weaken or fall while we're also seeing unprecedented levels of supply coming onto the market, which could lead to further falls if demand softens.'"

"That is not all. The Coalition Government has made depreciation allowances less generous, meaning many investors are already getting smaller tax deductions. Investors are also bracing for a possible change in government, with Labor proposing to wind back negative gearing and the capital gains tax discount."

"As is usually the case when circumstances change, there are casualties and some investors who bought properties at the top of the market may fall victim to the banks' tougher approach to lending. Michael Ilieff suspects some investors have become collateral damage."

"'It's a formula to make you look bad. It's a formula for you to fail,' he said. 'The bank wants to push you to the end to make you sell out, particularly for someone who might have purchased two years ago and doesn't have enough equity in the property. The bank probably wants to clear its books.'"