Greek crisis is nothing compared to China

[Gijoe]

We have a really pissed off dim sum here - apparently .

OT: Haven't been following chinese economy..it's news to me that there's a real estate slowdown as well.

Dim Sum your mom arshe, I'm no **** or Chinese. Stop dreaming I'm a Chinese, my nationality is Martian. Like it or hate it, it is your choice.

 

[OrionHunter]

In a nutshell.....Click to enlarge.

 

[illusion8]

In a nutshell.....Click to enlarge.

Their debt is internal - one govt institution lending to the other, I don't see any worrying aspect there.

 

[xyxmt]

anyone else think this was a inside job? i'm sure a group of rich Chinese made a profit out of this while the lowly peasant lost big.

Is thats what happened in Y2k Bubble in the US
Stock market are a gamble

 

[C130]

Is thats what happened in Y2k Bubble in the US
Stock market are a gamble

wall street is fixed as well

also is the Hang Seng tanking?

 

[xyxmt]

wall street is fixed as well

also is the Hang Seng tanking?

Its always fixed when you track the experts, day before hay hay China, best place to invest, day later same people saying total opposite.

 

[TrMhMt]

WW3 is approaching !

 

[dray]

It looks more like political drama than reality.




Lost in all the drama about the stockmarket is that it still plays a surprisingly small role in China. The free-float value of Chinese markets—the amount available for trading—is just about a third of GDP, compared with more than 100% in developed economies. Less than 15% of household financial assets are invested in the stockmarket: which is why soaring shares did little to boost consumption and crashing prices will do little to hurt it. Many stocks were bought on debt, and the unwinding of these loans helps explain why the government has been unable to stop the rout. But this financing is not a systemic risk; it is just about 1.5% of total assets in the banking system.


Read the rest here:

http://www.economist.com/blogs/freeexchange/2015/07/chinas-stockmarket-crash

Not really. Such stock market crashes are an indication of some deeper problem in the economy, and China has too many of them. Don't look at these events in isolation, China already has an extraordinarily high debt to GDP ratio for a mid-income economy, their private debts are also high, and mostly invested in highly bloated real estates and excess infrastructure projects that are not making money, to tackle the situation the stock market bubble was created, so that the extra money from stock market can be used to ease out the debts in those sectors. Now with the stock market money is vanishing in thin air, the ripple effect will only prepone the bursting of bubble in the real estates and infrastructure sectors. We are looking at NPAs (bad debts) of unprecedented level in Chinese banking system, big enough to collapse their banking system and economy as a whole.

And that's not all, Chinese policy makers are also trying to 'inflate away' the bad debts, that means they are trying to reduce the value of money to ease the bad debts in net value terms. Apart from price rise, this move will also increase the cost of production in China and further drive away the manufacturing industry out of China leading to increased unemployment and making the debt crisis more critical, which is already a trend there.

Chinese policy makers are creating one monster after another to kill the previous monster, assuming that China is above the basic principals of economy, and the monster is becoming bigger and uncontrolable with each passing day.

And apart from a massive economic crisis, we are also looking at a social crisis here, they don't have the automatic pressure releasing valve of a functioning democracy!

 

[atatwolf]

I think China will collapse and disintegrate soon. The writing is on the wall.

 

[OrionHunter]

Not really. Such stock market crashes are an indication of some deeper problem in the economy, and China has too many of them. Don't look at these events in isolation, China already has an extraordinarily high debt to GDP ratio for a mid-income economy, their private debts are also high, and mostly invested in highly bloated real estates and excess infrastructure projects that are not making money, to tackle the situation the stock market bubble was created, so that the extra money from stock market can be used to ease out the debts in those sectors. Now with the stock market money is vanishing in thin air, the ripple effect will only prepone the bursting of bubble in the real estates and infrastructure sectors. We are looking at NPAs (bad debts) of unprecedented level in Chinese banking system, big enough to collapse their banking system and economy as a whole.

And that's not all, Chinese policy makers are also trying to 'inflate away' the bad debts, that means they are trying to reduce the value of money to ease the bad debts in net value terms. Apart from price rise, this move will also increase the cost of production in China and further drive away the manufacturing industry out of China leading to increased unemployment and making the debt crisis more critical, which is already a trend there.

Chinese policy makers are creating one monster after another to kill the previous monster, assuming that China is above the basic principals of economy, and the monster is becoming bigger and uncontrolable with each passing day.

And apart from a massive economic crisis, we are also looking at a social crisis here, they don't have the automatic pressure releasing valve of a functioning democracy!

China's 'ghost' and abandoned cities. Where have all the people gone? They probably weren't there to begin with. Billions of dollars worth of infrastructure, but no takers....Has the housing bubble finally burst?

 

[forcetrip]

anyone else think this was a inside job? i'm sure a group of rich Chinese made a profit out of this while the lowly peasant lost big.

Long story short. It unfortunately was. About how this article is shaping it up to be. Far from the truth.

 

[dray]

Their debt is internal - one govt institution lending to the other, I don't see any worrying aspect there.

Not entirely true. Right now the biggest threat to Chinese banking system is the real estate debts, and these are private debts. That alone is capable of showing us a re-run of 2008 sub-prime crisis at a much larger scale. That bubble is waiting to be burst, and this stock market crisis has all the material to spark it.

Also read about the massive unregulated shadow banking system in China that is dangerously over-leveraged. Even local governments take loan from them...!

How Scary Is China's Shadow Banking System? - Forbes

CNBC Explains: Chinese shadow banking crisis

http://mobile.nytimes.com/2014/01/08/opinion/chinas-shadow-banking-problem.html?referrer=&_r=0

China’s shadow banks need ‘close monitoring’: IMF

China's shadow banking sector growing rapidly, third largest in world - FSB

 

[dray]

China's 'ghost' and abandoned cities. Where have all the people gone? They probably weren't there to begin with. Billions of dollars worth of infrastructure, but no takers....Has the housing bubble finally burst?

Chinese policy makers behaved recklessly to drive growth and boost GDP figures, and now paying the price for it.

 

[FaujHistorian]

Not really. Such stock market crashes are an indication of some deeper problem in the economy, and China has too many of them. Don't look at these events in isolation, China already has an extraordinarily high debt to GDP ratio for a mid-income economy, their private debts are also high, and mostly invested in highly bloated real estates and excess infrastructure projects that are not making money, to tackle the situation the stock market bubble was created, so that the extra money from stock market can be used to ease out the debts in those sectors. Now with the stock market money is vanishing in thin air, the ripple effect will only prepone the bursting of bubble in the real estates and infrastructure sectors. We are looking at NPAs (bad debts) of unprecedented level in Chinese banking system, big enough to collapse their banking system and economy as a whole.

And that's not all, Chinese policy makers are also trying to 'inflate away' the bad debts, that means they are trying to reduce the value of money to ease the bad debts in net value terms. Apart from price rise, this move will also increase the cost of production in China and further drive away the manufacturing industry out of China leading to increased unemployment and making the debt crisis more critical, which is already a trend there.

Chinese policy makers are creating one monster after another to kill the previous monster, assuming that China is above the basic principals of economy, and the monster is becoming bigger and uncontrolable with each passing day.

And apart from a massive economic crisis, we are also looking at a social crisis here, they don't have the automatic pressure releasing valve of a functioning democracy!

I posted an article from a reputable source.

Sadly you are going in circles now.

The biggest strength of China is not in buildings and stock markets.
The real wealth and strength is in its hard working industrious population. As long as they are willing to work, the losses described in OP are chump change.

If on the other hand Chinese workers start behaving like Bharati workers or worse like Pakistani warders, then China is a gonner. But this is a biiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiig iffffffffffffffffffffffff.

Peace

 

[Providence]

lol, you're still trapped in 2008? Those savvy Chinese investors gobbled up mansions at that time selling for 40% discount. Their investment is worth 60% more than it was in 2008.

Proving yet again who wants to settle where ?