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China’s State-Driven Growth Model Is Running Out of Gas

wsj.com

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Re: China’s State-Driven Growth Model Is Running Out of Gas

#91

Post by defertoreptar »

seanmcdirmid wrote: post #13
onetimemanytime wrote: post #9

Earlier quoted context omitted.

wow! Quality has a lot to do but also a house no one lives in has a tendency to be run down. A small thing that can be noticed on day one will ruin everything after 3 years of rain, wind, snow etc. Now their GDP will increase again, if they start repairing the ghost houses ;)

Actually, most buildings constructed in the last 10 years in big cities are expected to only last 20-30 years before being razed and redone. Chinese construction technique leverages cheap surplus uneducated labor, so they overbuild on concrete to compensate, meaning the buildings will fall apart faster anyways. The officials see this as a feature: real estate is just a huge jobs program, and the fact that they have t…

> The officials see this as a feature: real estate is just a huge jobs program, and the fact that they have to do it again just means more jobs on the future.

And in the meantime they're scratching their heads trying to figure out why their tertiary sector isn't growing.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#92

Post by onetimemanytime »

seanmcdirmid wrote: post #13
onetimemanytime wrote: post #9

Earlier quoted context omitted.

wow! Quality has a lot to do but also a house no one lives in has a tendency to be run down. A small thing that can be noticed on day one will ruin everything after 3 years of rain, wind, snow etc. Now their GDP will increase again, if they start repairing the ghost houses ;)

Actually, most buildings constructed in the last 10 years in big cities are expected to only last 20-30 years before being razed and redone. Chinese construction technique leverages cheap surplus uneducated labor, so they overbuild on concrete to compensate, meaning the buildings will fall apart faster anyways. The officials see this as a feature: real estate is just a huge jobs program, and the fact that they have t…

>>Actually, most buildings constructed in the last 10 years in big cities

what cities? In China? I hard about that but frankly in Eastern European countries the aim to last 100 years. Same in USA AFAIK. Properly prepared concrete last quite a long time, if protected from the elements.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#93

Post by dageshi »

gcatalfamo wrote: post #51

I was in China last month. Running out of gas is not exactly the analogy I would’ve chosen to describe the most thriving economy I have ever seen. As a side note, I have visited many companies while there and the Tencent HQ was the most awe-inspiring building, leaving the Bay Area architecture and building amenities looking incredibly dull.

The two are not necessarily the opposite of each other, I remember visiting Japan for the first time after hearing Japan had been in a relative economic slump for near decades, at the time I recall thinking "if that's what economic slump looks like I'll take some of that...".

In retrospect it's possible to see a thriving economy as the apex of a bubble but almost impossible to determine that at the time. The thing about China is though, it has had a phenomenal level of growth for a very long time, one would think this cannot go on forever and at some point their system must be tested by a real recession.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#94

Post by dageshi »

stunt wrote: post #55

Maybe a fun fact. A Chinese colleague of me was telling me how much money is going out with every wave of western media coverage on China’s future. They become worried and they invest abroad by buying assets or sending their children. Then I saw some articles blaming Chinese buyers causing housing market issue in other parts of the world like Sydney, London, and Vancouver. Remind me how everything is connected and ho…

I don't honestly blame them. Getting money and people out of a country is always going to be easier in the good times than the bad.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#95

Post by repolfx »

Gibbon1 wrote: post #72
tepidandroid wrote: post #60

Earlier quoted context omitted.

And The Economist. Can’t forget The Economist’s constant and sustained death knelling over China’s economy over the years. I just file all these away along with the other 8447372 similar articles predicting the imminent collapse of China.

It's like practical fusion, always 5-10 years away. The reasoning appears to be that since the Chinese refuse to follow the western consensus, their economy must then collapse.

In fairness, the examples we have of communist economies have all eventually collapsed, although it took many many decades for the USSR to do so.

China, so far, hasn't collapsed. Does that mean there's something fundamentally different about it that avoids the fate of the USSR, Venezuela etc? Maybe. But it's not like "fails to be capitalist, will collapse" is totally specious reasoning. It's just extrapolation from past example.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#96

Post by seanmcdirmid »

onetimemanytime wrote: post #92
seanmcdirmid wrote: post #13

Earlier quoted context omitted.

Actually, most buildings constructed in the last 10 years in big cities are expected to only last 20-30 years before being razed and redone. Chinese construction technique leverages cheap surplus uneducated labor, so they overbuild on concrete to compensate, meaning the buildings will fall apart faster anyways. The officials see this as a feature: real estate is just a huge jobs program, and the fact that they have t…

>> Actually, most buildings constructed in the last 10 years in big cities what cities? In China? I hard about that but frankly in Eastern European countries the aim to last 100 years. Same in USA AFAIK. Properly prepared concrete last quite a long time, if protected from the elements.

These are buildings put up by migrant workers, so properly prepared is relative. They make a trade off, it works for them.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#97

Post by repolfx »

nordsieck wrote: post #5
coliveira wrote: post #3

China's GDP is growing at 6.3%. What was the last time the US grew at even close to that rate?

> China's GDP is growing at 6.3%. It's not clear to me the extent one can trust the official numbers from China.

Bear in mind GDP can be manipulated yet true at the same time.

If the government tweaks regulations, lending criteria and does other things to trigger huge spending on building pointless ghost cities, that will legitimately increase GDP because GDP is just summing up "stuff being done". There's a very subtle but deeply embedded assumption in western talk about GDP: that high GDP indicates a lot of useful things are being made and sold. But in a hard-left economy like China that correlation is weak; it's possible for lots of people to be doing things that aren't useful.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#98

Post by coliveira »

RidingPegasus wrote: post #22
remote_phone wrote: post #10

Earlier quoted context omitted.

I think given China’s population growth, if the GDP doesn’t grow 6%, its considered a recession for them.

> given China's population growth Their population growth is lower than most of the West, some argue it even contracted last year. Why is everyone on this site so wildly misinformed about the largest country on Earth? Is this a US thing? https://www.nytimes.com/interactive/2019/01/17/world/asia/ch...

It is normal for Americans to think that other countries don't matter. That's why they're missing the point that China is already the richest country in the world and it is growing at double the pace of the US.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#99

Post by seanmcdirmid »

rorykoehler wrote: post #47
seanmcdirmid wrote: post #13

Earlier quoted context omitted.

Actually, most buildings constructed in the last 10 years in big cities are expected to only last 20-30 years before being razed and redone. Chinese construction technique leverages cheap surplus uneducated labor, so they overbuild on concrete to compensate, meaning the buildings will fall apart faster anyways. The officials see this as a feature: real estate is just a huge jobs program, and the fact that they have t…

I live in a HDB in Singapore and they are rock solid buildings. Way better than any of the apartment buildings I've lived in in the west. They are designed to be inhabited for 99 years (the length of the leasehold). I wouldn't be surprised if many are capable of lasting much longer.

Singapore mostly uses concrete, and it will crumble without the requisite maintenance (much faster than a western wooden, brick, or steel building). Overbuilding using cheap unskilled labor makes the maintenance problem worse, but not insurmountable.

Re: China’s State-Driven Growth Model Is Running Out of Gas

#100

Post by jbay808 »

RidingPegasus wrote: post #25
seanmcdirmid wrote: post #13

Earlier quoted context omitted.

Actually, most buildings constructed in the last 10 years in big cities are expected to only last 20-30 years before being razed and redone. Chinese construction technique leverages cheap surplus uneducated labor, so they overbuild on concrete to compensate, meaning the buildings will fall apart faster anyways. The officials see this as a feature: real estate is just a huge jobs program, and the fact that they have t…

It's the same in Japan, homes aren't made to last, you're only expected to get a few decades out of them. My Japanese friends in Sydney always found it bemusing that I lived in a 100+ year old house. It was hard for them to fathom doing that, even with renovations. The newer the better.

Except in Kyoto, at least...

https://realestate.co.jp/forsale/listing?order=4&page=19&bui...

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