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China's Subprime Crisis Is Here

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Re: China's Subprime Crisis Is Here

#131

Post by saiya-jin »

Golf_Hotel_Mike wrote: post #97
rosser wrote: post #81

Earlier quoted context omitted.

Dude, I was there . 30 seconds' googling yields citations from Time, the BBC, the NY Times, The Guardian, Wikipedia, and others. How about the guy whose hands were cut off when he tried to smuggle fuel across the border that wasn't closed? Or did that also not happen? EDIT: To be fair, I do remember noting a rather curious difference in tone and content in the reporting about the Nepali constitution's passage and the…

>How about the guy whose hands were cut off when he tried to smuggle fuel across the border that wasn't closed? What? I've never been anywhere near the Nepali border, but have spent enough time in India to know that it's not lawless anarchy. I'll have to ask you for a source on this please.

lawless? not at all. police corrupt to unbelievable levels and doing basically what they want in some places? hell yes

Re: China's Subprime Crisis Is Here

#132

Post by dh997 »

obblekk wrote: post #7
dh997 wrote: post #4

Earlier quoted context omitted.

Isn't the bigger issues China's structural draconian limits to freer movement of capital, external investment, the imaginary/real value of ghost cities and scale of holding illiquid foreign debt?

One by one: 1. Freer movement of capital. This is a false herring in my opinion. Virtually no countries outside the US/EU offer completely free movement of money. The thing that matters is whether this prevents foreign capital investment (because people are scared of not being able to get their money back). In China, I don't think it does based on the last few decades of foreign investment. 2. External investment. As…

Isnt there an entire replica of Paris with barely 1k people?

How can value be justified with whole half-finished cities with no customers?

Sounds like deferring a real-estate crash is only making a future event even more painful when that paper value evaporates and takes real comparables along with them.

Re: China's Subprime Crisis Is Here

#133

Post by karmacondon »

jcoffland wrote: post #33

The American media seems to jump at any opportunity to dismiss China as an economic threat. It makes us feel more secure but leads to a public informed only about one side of China's story. Namely the part our ego can handle. China has regularly surpassed the US in number of cars sold since 2009. China also holds more US debt than any other country. Another way to put that is the US government owes China over 1 trill…

It's interesting that all of the numbers in your post seem to be significant, but really aren't.

The US "owes" China a trillion USD because the Chinese, investing on a national scale, need a safe investment that can support trillions and trillions of yuans. And in that regard right now, the US is the only game in town.

China's GDP growth is high, but that's because they're starting from a GDP that's much lower than that of the US. As with any logarithmic curve, growth starts quickly and then becomes harder over time. China has a ways to go.

The number of cars sold and the number of children enrolled in school are indicators that China does indeed have a much larger population than the US. Almost all of the BRIC nations have large populations, but are still in the process of turning that into wild economic growth. We'll see.

Other than the missing context for the numbers you provide, I agree with your general sentiment. There is a bit of schadenfreude among the US media whenever China struggles economicallly. This is probably because China is the US's biggest economic and military rival now that the Soviet Union is gone. It's natural to cheer for your team and boo the other team. I wouldn't take too much offense.

Re: China's Subprime Crisis Is Here

#134

Post by puranjay »

saiya-jin wrote: post #117
oliwarner wrote: post #82

Earlier quoted context omitted.

That's a neighbour so there's an obvious local power advantage. It's not unimpressive though and I completely agree about there being a scale and general surplus of engineering prowess that the rest of us just can't comprehend. What is perhaps more alarming is their development of Africa. I passed through a few African countries last year and China was everywhere . They're in the up-and-coming metropolises like Addis…

well, and now let's look what their "competitor" (west) have done during those hundreds of years of presence there... Yes Chinese are not saints but pure capitalists, I see no evil in their actions. On the other hand, white man's actions there were evil on quite a few occasions

What's more evil: China following unethical economic practices to lift hundreds of millions out of poverty, or China following the rule book and letting hundreds of millions languish in poverty?

From where I stand, China NOT being pure capitalists for the good of their citizens is more evil.

It's well and good when a developed country talks about ethics and capitalism - they have the luxury to. But when a country where millions live in humiliating poverty, don't have enough to eat, and have no hope for the future, it would be far more evil to follow the book and let down these millions.

Re: China's Subprime Crisis Is Here

#135

Post by dh997 »

seanmcdirmid wrote: post #126
forgetsusername wrote: post #122

Earlier quoted context omitted.

> I haven't seen evidence that these ghost cities are the result of central planners building slack for expected growth. I think this reveals some bias. The evidence is the cities themselves. Or do you think that it's central planners merely trying to improve GDP numbers, but completely oblivious to the fact that Chinese citizens are urbanizing at a scale not seen before in human history?

If you are talking about Ordos New Town, it is local governments and tycoons trying to do something with their coal money. This isn't really central planning, more like investment options suck, and we can't just park our money in the bank, so let's build a city in the middle of nowhere! Ordos is filling up slowly, but it's clear at this point that many of the buildings will be torn down before they are ever occupied…

Exactly. Wealth transfer and mobility for some, but not growing a middle class sufficiently to realize these artificial investments. China could invest more in better equiping people to make and earn more value, so they can afford cleaner/nicer cars, homes, factories, etc.

Re: China's Subprime Crisis Is Here

#136

Post by chvid »

roddux wrote: post #104
chvid wrote: post #101

Earlier quoted context omitted.

"But they're completely backwards and corrupt, and have no idea what they're doing." What do you mean by that? (Your story seem to tell quite the opposite.)

I believe it was sarcasm making fun of a commonly held view.

Ok - :-)

Re: China's Subprime Crisis Is Here

#137

Post by oliwarner »

saiya-jin wrote: post #117
oliwarner wrote: post #82

Earlier quoted context omitted.

That's a neighbour so there's an obvious local power advantage. It's not unimpressive though and I completely agree about there being a scale and general surplus of engineering prowess that the rest of us just can't comprehend. What is perhaps more alarming is their development of Africa. I passed through a few African countries last year and China was everywhere . They're in the up-and-coming metropolises like Addis…

well, and now let's look what their "competitor" (west) have done during those hundreds of years of presence there... Yes Chinese are not saints but pure capitalists, I see no evil in their actions. On the other hand, white man's actions there were evil on quite a few occasions

You might as well argue that two wrongs make a right.

They don't though. We should all be helping underdeveloped African nations reach a basic level of education, economy and healthcare so they can decide their own future in the world.

As it is, they're being economically suppressed.

Re: China's Subprime Crisis Is Here

#138

Post by dharma1 »

At some point, some percentage of those loans will default.

Financially China can handle it, though when those loans default, the chain of events will also have some global consequences.

The question is, when the loans do default, and with it some effects to the real economy/people, what happens to the public perception of the government in China? There is a good chance of social unrest

Re: China's Subprime Crisis Is Here

#139

Post by dharma1 »

forgetsusername wrote: post #127
hackuser wrote: post #25

Earlier quoted context omitted.

> the government prints it's own money. Thus, when there is a credit crisis the government just recapitalizes the banks with freshly printed Yuan and sells off the bad loans at a discount. This has been tried by many governments and has a well-established track record as a disasterous solution. I believe the following is a well-established consensus in economics (though I may misremember some details): Printing money…

> Printing money on this scale doesn't add wealth to the economy Ceteris Peribus ... But when vast amounts of wealth vanish in a broad deleveraging you are merely replacing money. Case-in-point, the US pumped over $1TT into the economy since 2008, and yet the value of the dollar has gone through the roof, despite the cries that hyperinflation was around the corner.

Probably something to do with the safe haven status of the dollar. Whenever there is a sign of trouble in the global economy, investors dump soft/emerging economy currencies and buy dollars, yen and Swiss franc

Re: China's Subprime Crisis Is Here

#140

Post by viblo »

yueq wrote: post #34
slantedview wrote: post #29

Earlier quoted context omitted.

It was broader than subprime and derivatives even. It was a general real estate (housing) bubble. Home prices became massively inflated and the various investments tied to housing came crashing down. A similar result can be expected in China when the music eventually stops.

When price go up it doesn't mean a it's a bubble. Getting loans is way harder/regulated in China than 06/07 US. Currently 25+% down payment or 70% for 2nd home is required. -- Comparing in 2007 banks only asks for 3% down.

China have aggressively lowered the requirements the last years. At the moment it should be 20% for first and 30% for 2nd home. Still some way to go for US levels ofc.

www.mingtiandi.com/real-estate/china-real-estate-research-policy/china-lowered-downpayments-but-will-it-help-sell-homes-in-the-hinterland/

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