The PJ Tatler

A Divorce of Convenience

Perfectly happy couples are going to Splitsville to take advantage of a new law designed to cool off China’s housing bubble:

Divorce filings have surged like crazy in China over the past week, according to multiple reports. The reason? A new tax on property sales, which seems to have a loophole that lets people get around the tax if they separate from a spouse.

We first mentioned the surge on Wednesday, citing a report in Shanghai Daily.

Yesterday the NYT’s David Barboza followed up.

There are two big stories intertwined here.

The first is that China is trying to curb its well-known property boom. There’s a widespread belief that many markets in China are in bubble territory, and that a collapse or even a stall would be a catastrophe.

What’s interesting about the divorce story is the cat-and-mouse game that’s played between Chinese regulators and Chinese citizens/savers/investors who search out aggressive investment returns in the nooks and crannies of the law.

Tom Friedman will soon propose that China’s super-efficient government enact a law against unintended consequences.

(Hat tip to Debbie M., who finds all the good stuff.)