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How China's “debt traps” work

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Re: How China's “debt traps” work

#171

Post by l3mure »

ruthie_cohen wrote: post #169
dexwiz wrote: post #113

Earlier quoted context omitted.

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.

This is an incredibly naive take on an issue that is wide spread in China to the point of it being almost the norm. Confucianism does not lend itself well to crucial infrastructure , you know, things you don’t want to collapse. https://www.chinaexpatsociety.com/culture/the-chabuduo-minds... It’s an entire mindset.

Fascinating. Within the past 2 years, the US suffered 98 people killed in a condo collapse, and a fairly serious (though thankfully non-fatal) bridge collapse. There's also the especially egregious case a bit further back of the New Orleans levies failing during Katrina. Must have been undercover Confucians.

https://en.wikipedia.org/wiki/Surfside_condominium_collapse

https://www.npr.org/2022/01/28/1076343656/pittsburgh-bridge-...

Re: How China's “debt traps” work

#172

Post by ruthie_cohen »

l3mure wrote: post #171
ruthie_cohen wrote: post #169

Earlier quoted context omitted.

This is an incredibly naive take on an issue that is wide spread in China to the point of it being almost the norm. Confucianism does not lend itself well to crucial infrastructure , you know, things you don’t want to collapse. https://www.chinaexpatsociety.com/culture/the-chabuduo-minds... It’s an entire mindset.

Fascinating. Within the past 2 years, the US suffered 98 people killed in a condo collapse, and a fairly serious (though thankfully non-fatal) bridge collapse. There's also the especially egregious case a bit further back of the New Orleans levies failing during Katrina. Must have been undercover Confucians. https://en.wikipedia.org/wiki/Surfside_condominium_collapse https://www.npr.org/2022/01/28/1076343656/pittsbur…

If you really want to go down that road:

https://www.bbc.com/news/world-us-canada-61290444

https://www.bbc.com/news/world-asia-china-57830767

https://www.npr.org/2022/05/05/1096810346/survivor-found-alm...

https://www.bbc.co.uk/news/world-asia-china-66286576

-—

You simply cannot compare the two.

I could provide examples all day of how Chinese culture and the CCP allows this type of phenomenon to continue unabated.

It isn’t to say that there are serious infrastructure concerns in America that continue to go unaddressed.

But the scale of graft and shoddy construction in China beggars belief. It extends into every aspect of enterprise, taking shortcuts is the absolute cultural norm.

Re: How China's “debt traps” work

#173

Post by orangepurple »

deaddodo wrote: post #163
orangepurple wrote: post #91

Earlier quoted context omitted.

GDP is the wrong metric. Military strength and sustainability are the most important drivers for a country. Example: This is why North Korea is able to survive despite being blacklisted economically from most of the world. China is enabling its sustainability.

There is no wrong or right metric. Every aspect of a nation's existence has an effect on its survival. Mexico has a very weak and self-defense oriented military, but is under no threat of occupation or annexation. Mostly because it's continued existence benefits both the US and Canada, which offer a proxy protection. It also keeps relatively good trade relations with many powerful nations and has a large consumer eco…

Mexico's military is unable to control at least 30% of its territory and there is discussion of an American "special military operation" to destroy cartels.

Re: How China's “debt traps” work

#175

Post by deaddodo »

orangepurple wrote: post #173
deaddodo wrote: post #163

Earlier quoted context omitted.

There is no wrong or right metric. Every aspect of a nation's existence has an effect on its survival. Mexico has a very weak and self-defense oriented military, but is under no threat of occupation or annexation. Mostly because it's continued existence benefits both the US and Canada, which offer a proxy protection. It also keeps relatively good trade relations with many powerful nations and has a large consumer eco…

Mexico's military is unable to control at least 30% of its territory and there is discussion of an American "special military operation" to destroy cartels.

And yet they're still sovereign.

You're only reinforcing the point with your flights of fancy, not countering it.

Re: How China's “debt traps” work

#176

Post by NicoJuicy »

yorwba wrote: post #103
NicoJuicy wrote: post #90

Earlier quoted context omitted.

The mostly state owned companies? :) And getting back the money from loans is also a win.

If this was such a win, why did they stop? A lot of that money didn't "get back" but ended up in various officials' offshore bank accounts. ( Many executives at China Development Bank got busted for corruption https://www.caixinglobal.com/2021-11-08/chart-of-the-day-cor... ) And then there's the opportunity cost of not having those companies build something useful instead.

Because the road one belt failed. They didn't gain much influence with it, they did the opposite. Eg. the delivered projects aren't good quality either.

And it wasn't going to get any better.

They did also succeed at a small coverup for their construction overcapacity at home.

But let's be clear: all those projects had to be paid.

There's just a difference to get the money without actually delivering those projects, not everyone is happy :)

Re: How China's “debt traps” work

#177

Post by wheelerof4te »

seanmcdirmid wrote: post #149
wheelerof4te wrote: post #106

Earlier quoted context omitted.

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."

"American news company with a primary user base in America."

And it's infamous for misrepresenting the other parts of the world to better suit USA's interests. Cases of outright lying and negative propaganda that they know is a lie abound.

Re: How China's “debt traps” work

#178

Post by throwaway2990 »

ccding wrote: post #166
throwaway2990 wrote: post #142

Earlier quoted context omitted.

[flagged]

This is not true. In China, buyers have to pay the down payment and mortgage before the apartment is built, but for some reason if the builder left the apartment half built, buyers do get their money back from the bank.

No. You don’t pay off a mortgage before the home is built lol. That’s the dumbest thing I’ve ever heard.

You have to pay in full to the developer. By taking out a loan which consists of a downpayment.

The developer now has 100% of the money. And the buyer has nothing but debt.

The developers are either never breaking ground or never completing the building. Using the money to buy more land and sell more homes.

When they file for bankruptcy. The banks still need the money back from the buyer. Since the buyer has no home because it was never finished they effectively lose their investment and their lives as debt collection takes their cars, live-in home. Etc.

Stop spreading misinformation that buyers aren’t suffering. This is people’s lives at stake. Lying to people and pretending like nothing is wrong makes you a terrible human being when people’s lives are at stake.

Re: How China's “debt traps” work

#179

Post by lenkite »

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 government of China let developers sell un-built apartments to future residents.

This happens in India also.

Re: How China's “debt traps” work

#180

Post by littlestymaar »

stale2002 wrote: post #43
pphysch wrote: post #25

For those who are curious about a serious analysis of China's foreign development policies, rather than a misinformational blog post: https://www.chathamhouse.org/2020/08/debunking-myth-debt-tra... That one is from 2020 but there are a lot of serious people looking at these complex issues.

> That one is from 2020 Then it is outdated. The new information related to the belt and road project's failures has only started to come up in the last couple years. I can understand why someone who doesn't have the updated information, based on recent economic data, would have a more nuanced view. But we have the new information now.

Even if it's not perfect, better have outdated informed point of view than “up to date” gut feeling from a pundit though…
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