Greek crisis is nothing compared to China

[VCheng]

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

Not anytime soon. This market correction will not destroy China's economy, or its unity.

 

[Jlaw]

Proving yet again who wants to settle where ?

It proves you Americans are idiots. They are investors, see a deal and make money off you

 

[dray]

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

The "Blog" section of that The Economist is barely credible. For example, I can show you a childish blog in The Economist by some Bangladeshi writer after their World Cup semifinal defeat. On the contrary, the links that I have posted seem to be far more credible.

Besides, that was my first 'own post' in this thread, so I cannot go on circles in my very first post. I guess economics is not one of your favourite subjects.

And if the hard working Chinese were all that matters, then China wouldn't have been a prominent economic power for only last 2 decades or so in last few hundred years!!

Peace.

 

[FaujHistorian]

The "Blog" section of that The Economist is barely credible. For example, I can show you a childish blog in The Economist by some Bangladeshi writer after their World Cup semifinal defeat. On the contrary, the links that I have posted seem to be far more credible.

Besides, that was my first 'own post' in this thread, so I cannot go on circles in my very first post. I guess economics is not one of your favourite subjects.

And if the hard working Chinese were all that matters, then China wouldn't have been a prominent economic power for only last 2 decades or so in last few hundred years!!

Peace.

point well taken. Thanks.

Oh in the last two decades Chinese simply reclaimed their "industrial center" status that they have held for at least 350 years if not longer.

Communist policies in China were terrible, in fact more so than Nehruvian socialism in India.

Once such terrible ideas were thrown in garbage, both India and China progressed by leaps and bounds.

 

[Nicky G]

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

That snapshot makes some very good points.

Essentially, China went on a rampage to boost growth or rather show growth by inflating their real estate bubble which are nothing but NPA.

Combining everything, they might just be in for their lost decade, not unlike the Japanese. Anyway, we all get to enjoy the show.

 

[Providence]

Millions of ordinary Chinese citizens poured borrowed cash into shares, which inflated prices to unsustainable levels.

When prices began to dip, these investors were forcing to sell shares to pay back the borrowed money and cover losses. That vicious circle of selling is creating "panic" and pushing down prices.

A huge amount of money has been put into Chinese stock markets over the past year or so by regular Chinese people, something the government has encouraged. There are now 90 million "retail" investors — ordinary people who own stocks — in China, making up 80% of all shareholders.

 

[Echo_419]

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.

Sane here that money surely went somewhere

 

[Spectre]

That snapshot makes some very good points.

Essentially, China went on a rampage to boost growth or rather show growth by inflating their real estate bubble which are nothing but NPA.

Combining everything, they might just be in for their lost decade, not unlike the Japanese. Anyway, we all get to enjoy the show.

Can you comment on India's real estate bubble? I would advice you to look into it, situation if not worse is similar to China.

Millions of unsold inventory but still sky high prices. Developers upto their neck in debt and going for restructuring after restructuring to avoid NPA classification.

The situation is infact so dire that if banks pull the plug the whole organized real estate sector in India will crash and burn.

We should be trying for a soft crash by slowly reducing the price to meet the demand but no, these developers are artificially keeping the prices sky high despite there being no demand at that price while suffering enormous losses due to interest burden.

 

[Nicky G]

Can you comment on India's real estate bubble? I would advice you to look into it, situation if not worse is similar to China.

Millions of unsold inventory but still sky high prices. Developers upto their neck in debt and going for restructuring after restructuring to avoid NPA classification.

The situation is infact so dire that if banks pull the plug the whole organized real estate sector in India will crash and burn.

We should be trying for a soft crash by slowly reducing the price to meet the demand but no, these developers are artificially keeping the prices sky high despite there being no demand at that price while suffering enormous losses due to interest burden.

I have looked into real estate bubble in India, if one can call it that. I have dabbled a bit it in from time to time. Where are the figures to back up your claim of it being comparable to China? Inventory pile up in a few limited metros is nothing compared to entire ghost towns of China.

Indian real estate prices are driven up by the need for black money that needs parking. Its all essentially a panzi scheme. You start new projects, get money from those who book flats, launch another one. With stringent regulations, the situation will gradually ease out.

 

[Spectre]

I have looked into real estate bubble in India, if one can call it that. I have dabbled a bit it in from time to time. Where are the figures to back up your claim of it being comparable to China? Inventory pile up in a few limited metros is nothing compared to entire ghost towns of China.

Indian real estate prices are driven up by the need for black money that needs parking. Its all essentially a panzi scheme. You start new projects, get money from those who book flats, launch another one. With stringent regulations, the situation will gradually ease out.

First hand, I have knowledge from my prior work in banks where I was looking into distressed assets of marquee real estates companies in India.

For the rest, I based my comments on the below article

The ever expanding debt bubbles of China and India | Business Line

 

[dray]

point well taken. Thanks.

Oh in the last two decades Chinese simply reclaimed their "industrial center" status that they have held for at least 350 years if not longer.

Communist policies in China were terrible, in fact more so than Nehruvian socialism in India.

Once such terrible ideas were thrown in garbage, both India and China progressed by leaps and bounds.

The point I was making was that policies and their effective implementation decide how well workers would work or whether they will get any work at all. Maybe at some point in time in history China was an industrial centre and India was an economic centre and Romans used to rule half of the world....but then did the Romans suddenly became all weak and cowards? Nations rise and fall because of the policies and leadership, not because of perceived hard-working nature or bravery, these are outcomes of the policies and their implementation. For example, your perception about Indian work force did not prevent India from becoming a leading IT & ITES hub and global automobile manufacturing hub.

I think China goofed up its policies after the 2008 crisis, and this was my steady opinion for last 5-6 years or so.

 

[Providence]

First hand, I have knowledge from my prior work in banks where I was looking into distressed assets of marquee real estates companies in India.

For the rest, I based my comments on the below article

The ever expanding debt bubbles of China and India | Business Line

Are u in BlackStone. I might offer you a job

 

[Guynextdoor2]

yeah I think there is a problem in China, probably very underestimated till now. There seems to be a real estate bubble building up there.

I also think that technology venture funding is turning into a bubble in India.

 

[illusion8]

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

That's what I meant - most construction activities are carried out by the state itself, debt is given and received by CCP's own state bodies.

“It’s a way for local governments to get funding or financing. These municipalities set up a company and invest in it. They’re essentially off balance sheet vehicles of the banking system,”

Real estate slowdown will have an impact on debt servicing - but then...the debt mostly is mostly renminbi and yuan..more can be printed and more can be written off when needed. Outside component input into the chinese infra and manufacturing industry is quite limited, so the risk of bad debt is contained inside china.

chinese collapse has been doing the rounds since a few years - and I don't buy it. @FaujHistorian is right...till the time china maintains its enormous manufacturing base and its huge competitive edge and a massive consumer market...any talk of collapse is just a fad.

Unless there are some hidden political turmoil brewing... ?.

 

[Providence]

yeah I think there is a problem in China, probably very underestimated till now. There seems to be a real estate bubble building up there.

I also think that technology venture funding is turning into a bubble in India.

Just because the current business model are not viable in long run ?

Have done a bit of research when I was in RocketInternet. We are betting big on INDIA