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

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

#51

Post by aylmao »

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…

Not sure why this comment is getting downvoted. I think it's relevant to the discussion, whether people agree with it or not.

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

#52

Post by ilikerashers »

acyou wrote: post #39
AnthonyMouse wrote: post #19

Earlier quoted context omitted.

> 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 ther…

I should have been more clear - this is to indicate that "we" can't lose, meaning society as a whole. Individuals for sure can lose their shirts, but overall, this bank collapsing won't be an issue. This bankruptcy happening and not causing a huge, devastating, world ending crash is a gigantic feature of the Chinese economy. Not a bug. It means asset values in China are deflating in a semi-controlled manner. People l…

Expectation is that across the world, sustained med-high interest rates will cause deflating of multiple bubbles, Private Equity, zombie multinationals, residential+commercial RE.

It doesn't feel like a "black swan" but some of these approaches to making money could be going away. Dropping interest rates and printing money requires a set of circumstances which aren't there.

Deflating those bubbles will destroy a lot of individual wealth, that is where it's going to get bumpy.

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

#53

Post by Scoundreller »

topper-123 wrote: post #46
AnthonyMouse wrote: post #19

Earlier quoted context omitted.

> 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 ther…

Yeah, if you buy a house when you have little equity, your equity can go up manyfolds from the purchase, but at the risk that if you time the purchase badly, you’re in a bad spot for many years.

“Leverage goes both ways”

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

#54

Post by orwin »

jimbob45 wrote: post #43
midoridensha wrote: post #31

Earlier quoted context omitted.

>- China's fertility rate dropped to record low 1.09 in 2022 >- China records fewest marriages in more than 3 decades Wow, at this rate, they might just overtake South Korea for lowest birth and marriage rates within the decade.

Wow, I thought you were making that up. It’s real. Why not just repeal the child limitations then? No reason to keep them in place if the rate is that low.

They did repel them, twice (once to put the limit to 2, now it's 3).

They also forcibly 'immigrate' SEA women since 2010[0], forming a combo with the Gulf countries : the Gulf enslave the men under false promises, then cartels raid villages, capture and sell the women (Vietnam is the only country where the state is strong enough to limit that). Sadly is hard to investigate the issue correctly, given China's lack of transparency, but it is possible that despite relatively closed borders, China now lead the world in sex trafficking, overtaking the Magreb (morroco to lybia).

[0] https://www.hrw.org/news/2019/10/31/chinas-bride-trafficking...

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

#55

Post by geysersam »

kristofferg wrote: post #20
dragonelite wrote: post #11

Earlier quoted context omitted.

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, respo…

> GDP capita flattened at 13k

Flattened? It's growing something like 5% per year.

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

#56

Post by bufferoverflow »

FpUser wrote: post #22
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.

>"real estate assets everywhere but China now look better in the long term." They do not look better. They look inflated and unaffordable. If not fixed this will have social consequences at some point and it won't be pretty.

Housing can't be inflated and unaffordable at the same time. Someone is buying properties, driving prices higher. Those someone can definitely afford housing.

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

#57

Post by oblio »

aylmao wrote: post #51
dragonelite wrote: post #11

Earlier quoted context omitted.

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…

Not sure why this comment is getting downvoted. I think it's relevant to the discussion, whether people agree with it or not.

> it was all about keeping asians down and dependent.

Probably because of this. The US is allied to several prosperous Asian countries.

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

#58

Post by oblio »

geysersam wrote: post #55
kristofferg wrote: post #20

Earlier quoted context omitted.

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, respo…

> GDP capita flattened at 13k Flattened? It's growing something like 5% per year.

https://news.ycombinator.com/item?id=37171762

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

#59

Post by [deleted] »

jamesaurichs wrote: post #18

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 bigges…

[deleted]

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

#60

Post by fmajid »

whimsicalism wrote: post #25
jamesaurichs wrote: post #18

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 bigges…

Yes, it is not looking good for their outlook. That said, nobody is seriously claiming Chinese youth unemployment at 50% unless you are looking at something like labor force participation rate, which is then a similar number for the US as well.

A Peking University professor of economics says it is 46.5% if you use the same definition as in the US:

https://archive.ph/L6ZfU

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