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China’s property giant Evergrande files for bankruptcy protection in Manhattan

cnbc.com

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Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#11

Post by dragonelite »

ipnon wrote: post #5

There are many real estate giants and so-called "trust" companies who are incapable of repaying debt right now. Some of these companies have trillions in RMB on their balance sheets. The central bank can bail them out but at the expense of the assets of the middle and lower class. This would only further incentivize cash hoarding, and tighten the middle income trap. It is not an enviable situation.

China will not be captured by the middle income trap because it has already escaped the middle income trap. The middle income in my opinion has a different reason countries get stuck there and its by design. Because the road to high income is protected by western IP protection. Patents are way for the west to forever license fees for their high end technology, China is beating the west in new IP generation and hence will get an ever bigger share of the high end technology fees income. If one thing i expect western nations most likely EU nations to slip back into middle income status and get trapped their with their suicidal foreign policy.

I got this insight in 2016 when the US started its suicidal trade and tech war with China which they claimed would be easy to win. It was never about money or trade it was all about keeping asians down and dependent.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#12

Post by irjustin »

csomar wrote: post #8
roschdal wrote: post #6

Earlier quoted context omitted.

Evergrande files for bankruptcy protection. The China Evergrande Group is the second largest property developer in China by sales. "History never repeats itself, but it does often rhyme", etc.

The chinese stock market (Shanghai index) has been through lots of boom and busts. It didn't affect western market in the slightest. I'd not expect otherwise. The only difference is that if the Chinese economy tanks hard (great depression style), this might be contagious to the rest of Asia and eventually to the rest of the world. But any guess is good if that happens.

Agreed a crash in China would have fallout but not 08/09. The Chinese housing market was fueled by the familial need to own a house. Which led people to lead no matter what people would buy property, basically "stocks always go up"... "housing always goes up"...

We can never run out of buyers!

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#13

Post by seydor »

acyou wrote: post #9

There is a sort of balance where one market going down makes another go up. For example, real estate assets everywhere but China now look better in the long term. Bank crashing = money printing = asset values go back up. Can't lose.

higher is not better

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#14

Post by greesil »

cscurmudgeon wrote: post #10
adra wrote: post #2

Nice, creates corporation in tax havens to maximize tax dodging, files for bankruptcy in country that can actually put disgruntled debt owners to task. Good ol' capitalism.

Under "Good ol' capitalism" companies like Evergrande won't exist in the first place. Edit: CCP imposing market restrictions causing average folks to invest only in real estate is not "Good ol' capitalism".

Capitalism, like socialism, or postmodernism, or the labels conservative or liberal are almost devoid of meaning. But please, both the parent commenter and you keep arguing what the true meaning of capitalism is.

Meanwhile I will head to the market and barter some of my guns for butter.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#15

Post by [deleted] »

dragonelite wrote: post #11
ipnon wrote: post #5

There are many real estate giants and so-called "trust" companies who are incapable of repaying debt right now. Some of these companies have trillions in RMB on their balance sheets. The central bank can bail them out but at the expense of the assets of the middle and lower class. This would only further incentivize cash hoarding, and tighten the middle income trap. It is not an enviable situation.

China will not be captured by the middle income trap because it has already escaped the middle income trap. The middle income in my opinion has a different reason countries get stuck there and its by design. Because the road to high income is protected by western IP protection. Patents are way for the west to forever license fees for their high end technology, China is beating the west in new IP generation and hence…

[deleted]

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#16

Post by steve76 »

acyou wrote: post #9

There is a sort of balance where one market going down makes another go up. For example, real estate assets everywhere but China now look better in the long term. Bank crashing = money printing = asset values go back up. Can't lose.

[dead]

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#17

Post by vxNsr »

irjustin wrote: post #12
csomar wrote: post #8

Earlier quoted context omitted.

The chinese stock market (Shanghai index) has been through lots of boom and busts. It didn't affect western market in the slightest. I'd not expect otherwise. The only difference is that if the Chinese economy tanks hard (great depression style), this might be contagious to the rest of Asia and eventually to the rest of the world. But any guess is good if that happens.

Agreed a crash in China would have fallout but not 08/09. The Chinese housing market was fueled by the familial need to own a house. Which led people to lead no matter what people would buy property, basically "stocks always go up"... "housing always goes up"... We can never run out of buyers!

isn't the chinese market even more messed up because people are buying houses that don't exist yet, at least in 08/09 there was something, the asset itself, while overvalued did at least have some value, in china a lot of people just own and are paying a mortgage on a future promise.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#18

Post by jamesaurichs »

Some real estate related news from China:

- Country garden, China's second biggest property company after Evergrande, missed a mere 22.5M payments for dollar denominated bonds. It is trying to restructure a $340B debt owned. https://abcnews.go.com/Business/wireStory/chinas-government-...

- Li Ka Shing, richest man in Hong Kong, just offered an immediate 30% off on his newest buildings for sale

- One of China's biggest shadow banks skipped payment. These shadow banks provide liquidity to real estate companies, in short. https://www.bloomberg.com/news/articles/2023-08-16/chinese-s...

Some economic related news from China:

- China stopped reporting youth unemployment, estimated around 20-50%. Which is why nobody really thinks China is growing at 5%. https://www.washingtonpost.com/world/2023/08/15/china-econom...

- foreign investment fell down 87% from the same period last year, lowest level in 25 years. https://www.bloomberg.com/news/articles/2023-08-07/china-for...

- China's fertility rate dropped to record low 1.09 in 2022 https://www.reuters.com/world/china/chinas-fertility-rate-dr...

- China records fewest marriages in more than 3 decades https://www.cnn.com/2023/06/12/china/china-marriages-record-...

- China's exports fell by 14.5% in July from a year ago, while imports dropped by 12.4% https://www.cnbc.com/2023/08/08/china-reports-double-digit-p...

- China's economy slipped into deflation https://www.bbc.com/news/business-66435870

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#19

Post by AnthonyMouse »

acyou wrote: post #9

There is a sort of balance where one market going down makes another go up. For example, real estate assets everywhere but China now look better in the long term. Bank crashing = money printing = asset values go back up. Can't lose.

> Bank crashing = money printing = asset values go back up. Can't lose.

If you buy real estate right before a housing crash, you immediately lose a lot of money vs. having just sold or not bought it, and even if the prices recover in the long term it can take years.

Meanwhile you can't refinance the loan at the new lower rates because you're underwater and no longer have the collateral for a loan that size.

Then there's the "risk" that people learned the lesson of the last housing crash and don't do the same thing, i.e. reinflate a housing bubble right after it pops. This wouldn't even have to be not lowering interest rates, it could just be lowering them but continuing the existing momentum behind relaxing zoning rules so the lower rates can fund new construction. Then the low rates save the rest of the economy but real estate prices stay reduced because the lower interest rates are offset by (and pay for) new construction.

You can definitely lose.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#20

Post by kristofferg »

dragonelite wrote: post #11
ipnon wrote: post #5

There are many real estate giants and so-called "trust" companies who are incapable of repaying debt right now. Some of these companies have trillions in RMB on their balance sheets. The central bank can bail them out but at the expense of the assets of the middle and lower class. This would only further incentivize cash hoarding, and tighten the middle income trap. It is not an enviable situation.

China will not be captured by the middle income trap because it has already escaped the middle income trap. The middle income in my opinion has a different reason countries get stuck there and its by design. Because the road to high income is protected by western IP protection. Patents are way for the west to forever license fees for their high end technology, China is beating the west in new IP generation and hence…

Some bold claims with little evidence. GDP capita flattened at 13k is hardly “escaped the middle income trap”. IPs can be harmful to growth but then again China has never shown any intent to enforce IPs of western origin. There are no evidence of the US wanting to “keep asians down” - many of USAs asian trading partners enjoy less trade regulation. The “trade war” might be counterproductive but was a, imo mild, response to the extreme levels of protectionism exhibited by the chinese communist party.
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