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How China's “debt traps” work

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Re: How China's “debt traps” work

#141

Post by evertedsphere »

ilickpoolalgae wrote: post #51
csomar wrote: post #48

I've recently rode through a Belt&Road project: The Lao high-speed train. In my opinion, it shows the complete failure of the Chinese government. The high-speed train is a reasonably great train that goes through dozens (hundreds?) of mountains and rivers (through tunnels and bridges). It does that while enabling you to work from the comfort of your chair. And while it's not high-speed (as in 300Km/h), it is reasonab…

I'm not sure if it's comparable, but the Japanese Shinkansen had similar issues when it's first built. A lot of the stations didn't go through the existing central stations due to costs and other logistical problems. This is why there are a lot of stations that the Shinkansen goes through that are called "Shin-XXX" (e.g. Shin Osaka). During a period of fast economic growth this isn't a big issue because the areas aro…

(for those who might not know, shin 新 = "new")

Re: How China's “debt traps” work

#142

Post by throwaway2990 »

wheelerof4te wrote: post #75
Animats wrote: post #23

It's not just internationally. China has done that to its own people. Or worse. Look at Evergrand and Sunac. The government of China let developers sell un-built apartments to future residents. The residents not only paid down payments, but took on a mortgage obligation for an un-built building . "The majority of new properties in China — about 90% — are sold before being completed." - CNN. This produced a terrible i…

"The majority of new properties in China — about 90% — are sold before being completed." - CNN" Not sure if this is some kind of joke. Many countries have laws that permit selling appartments when they are about 80% complete. Some have lower, some higher percentages. Just your average low-tier negative CNN propaganda, I guess.

[flagged]

Re: How China's “debt traps” work

#143

Post by washadjeffmad »

wheelerof4te wrote: post #106
seanmcdirmid wrote: post #101

Earlier quoted context omitted.

Nothing you stated in your comment contradicts the statement from CNN that you are quoting. I'm guessing this is about CNN describing to its American readers what you take as a natural harmonious fact?

I am commenting because CNN portraits this as something negative when it comes to China. When in fact, it's fairly normal situation almost anywhere in the world.

Sinophobic pandering is hot all over. "Nothing to miss, here" is the intent, as if it would be crippling somehow for viewers to discover that not all of the world is developing.

Re: How China's “debt traps” work

#144

Post by nonethewiser »

dexwiz wrote: post #113
mpsprd wrote: post #85

This article makes me think about "tofu-dreg projects" [0] Poor quality construction work prevalent in mainland china. If you look for content with this keyword, you will find jaw dropping videos of constructions workers bending or breaking "rebar" with their hands, Owners chipping away concrete in high-rise buildings like its sand, etc. Of course some of this can be propaganda, but considering it has a local name, t…

It does have a propaganda feeling to it. I went thru the top 25 YouTube videos for tofu dreg recently, and they had that undertone of hoping for China to collapse. There are crappy building practices in any country. The real question is prevalence, which I can’t seem to answer.

Then where are the videos of western tofu dreg? China has a literal army of propaganda posters. Am I supposed to believe such problems exist and it never occurred to them to push it?

Re: How China's “debt traps” work

#145

Post by gorgonical »

throwaway2990 wrote: post #142
wheelerof4te wrote: post #75

Earlier quoted context omitted.

"The majority of new properties in China — about 90% — are sold before being completed." - CNN" Not sure if this is some kind of joke. Many countries have laws that permit selling appartments when they are about 80% complete. Some have lower, some higher percentages. Just your average low-tier negative CNN propaganda, I guess.

[flagged]

I think this is a key point to catch in this discussion. Like a sibling comment said, this is the way things are done in his EU country, but the big difference is that EU countries are higher-trust with way more financial regulation and accountability. China's economy is fundamentally not predicated on the rule of law and that's an important point here.

Re: How China's “debt traps” work

#146

Post by throwaway29812 »

slantedview wrote: post #140
throwaway29812 wrote: post #122

Earlier quoted context omitted.

Really? What record does the US have leveraging aid for UN votes, political concessions, or just seizing ports and land?

Leveraging aid packages for UN votes and political concessions is standard geopolitics. For example, just a few weeks ago, it was discovered that the US leveraged an IMF deal to get Pakistan to back the war in Ukraine: https://theintercept.com/2023/09/17/pakistan-ukraine-arms-im...

Aid for pro-democracy or pro-US policies is standard practice, of course.

But has the US threatened countries if they don't vote with them at the UN, or seized their land and/or assets for non payment of debt?

Re: How China's “debt traps” work

#147

Post by nonethewiser »

wheelerof4te wrote: post #75
Animats wrote: post #23

It's not just internationally. China has done that to its own people. Or worse. Look at Evergrand and Sunac. The government of China let developers sell un-built apartments to future residents. The residents not only paid down payments, but took on a mortgage obligation for an un-built building . "The majority of new properties in China — about 90% — are sold before being completed." - CNN. This produced a terrible i…

"The majority of new properties in China — about 90% — are sold before being completed." - CNN" Not sure if this is some kind of joke. Many countries have laws that permit selling appartments when they are about 80% complete. Some have lower, some higher percentages. Just your average low-tier negative CNN propaganda, I guess.

But are they paying mortgages for something that doesn’t exist at all?

Re: How China's “debt traps” work

#148

Post by nonethewiser »

26fingies wrote: post #82
wheelerof4te wrote: post #75

Earlier quoted context omitted.

"The majority of new properties in China — about 90% — are sold before being completed." - CNN" Not sure if this is some kind of joke. Many countries have laws that permit selling appartments when they are about 80% complete. Some have lower, some higher percentages. Just your average low-tier negative CNN propaganda, I guess.

i was gonna say - a lot of places you can put a bunch of cash down for an apartment that only exists as a picture on a sign somewhere.

You mean like a deposit, right? Not a mortgage.

Re: How China's “debt traps” work

#149

Post by seanmcdirmid »

wheelerof4te wrote: post #106
seanmcdirmid wrote: post #101

Earlier quoted context omitted.

Nothing you stated in your comment contradicts the statement from CNN that you are quoting. I'm guessing this is about CNN describing to its American readers what you take as a natural harmonious fact?

I am commenting because CNN portraits this as something negative when it comes to China. When in fact, it's fairly normal situation almost anywhere in the world.

CNN is addressing its American audience to a practice that is not familiar in the USA. Yes, CNN is USA-centric, because...it is an American news company with a primary user base in America.

That other countries mortgage unbuilt homes is more a "what about" rather than "facts needed for reader to understand."

Re: How China's “debt traps” work

#150

Post by littlestymaar »

Animats wrote: post #23

It's not just internationally. China has done that to its own people. Or worse. Look at Evergrand and Sunac. The government of China let developers sell un-built apartments to future residents. The residents not only paid down payments, but took on a mortgage obligation for an un-built building . "The majority of new properties in China — about 90% — are sold before being completed." - CNN. This produced a terrible i…

> In most of the rest of the world, developers have to finance construction with their own money or a high-interest construction loan, then sell the completed building. This gives developers a strong incentive to finish the job.

I don't know how it works in other countries but in France for new apartments you almost always buy them before or during construction, which allow new residents to settle in right after the construction has finished instead of waiting for months for the sale.

The way we deal with the incentive alignment is simply by having a justice system that makes sure contracts are actually enforceable and mandatory insurance policy for developers should anything bad happen to their company.

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