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OK, how are the liquidations of housing in China to finance bubbles elsewhere in the world able to avoid a China bust? Got a SWAG anybody? Selling highly leveraged properties in China at anywhere near the rates needed to pay cash for properties in the US, Canada and Australia does not sound sustainable to me but it is purportedly been going on at ever faster rates since the meltdown. This I do not understand.The reason I ask is that I am getting conflicting reports about whether China's banking system has more bad loans than the US banking system has loans.
Their three big problems:
a) the copper bubble which was the result of a financing scheme
b) the Ghost Cities as you pointed out
c) black market loan sharks servicing small businesses
These are the result of bad economic planning on the part of the Chinese. All of their fiscal and monetary policy decisions are routinely scrutinized by morons in the West. They really aren't interested in neoliberalism, but continue to pursue oddball policies at times.
The biggest problem in the Chinese financial system are the off balance sheet pools of capital that have been financing construction, particularly residential real estate.
Last year, 42% of all homes purchased in China were second homes.
So they say, and while you may be willing to take their word for it I'll withhold judgement until I see the actual numbers (--more often than not these claims don't have numbers). fwiw, in serious business circles the UN doesn't have nearly the traction that we'd have with say, the FED or OECD, and while they got indexes they don't have monetary values --and that's the only way we're going to have any serious chance of comparing output.Those numbers are extrapolated from the United Nations System...Let's understand that the numbers you presented came from this website run by the government of the People's Republic of China --those wonderful people that denied the SARS scandal, the river pig epidemic, and the AIDS contaminated blood banks. Don't get me wrong, the PROC's numbers on industrial output may actually be right, but that source clearly has an agenda and other sources with better track records differ....look at the numbers. Their industrial output has increased 120%...
The bottom line here is that if we're comparing China/U.S. output, then the best we can do is say China's output per capita is about a fourth of that of the U.S.
For the first time for over a century the US has been definitively replaced as the worlds largest industrial producer. Such a once in a century shift can literally only be described as historic.
Exactly --and when we look at sales figures of the goods produced and then try and guess at exchange rates we get to the point where nobody really knows how China's production compares to America's.The important point is, what is each country producing?For the first time for over a century the US has been definitively replaced as the worlds largest industrial producer. Such a once in a century shift can literally only be described as historic.
If we're saying China and the U.S. produces somewhere about the same then we have to look at the fact that America does with 29 million factory workers what China has to do with 226 million factory workers. That would mean American worker productivity is eight times that of China.The more important point is who is producing the more easily and cheaply automated goods?
The bottom line here is that if we're comparing China/U.S. output, then the best we can do is say China's output per capita is about a fourth of that of the U.S.
So they say, and while you may be willing to take their word for it I'll withhold judgement until I see the actual numbers (--more often than not these claims don't have numbers). fwiw, in serious business circles the UN doesn't have nearly the traction that we'd have with say, the FED or OECD, and while they got indexes they don't have monetary values --and that's the only way we're going to have any serious chance of comparing output.
Of course, none of that changes the fact that we're talking about industrial production from four times the population, and you're saying "China has overtaken the US". That's a conclusion that could only be accepted by someone who's not thinking, or someone who truly hates America.
Let's work together.
There's another tread on this board that talks about how the Swiss have a higher per capita income than the U.S. Sure, some moron could say "total disposable personal income in Switzerland is only a twentieth of that in the U.S." and ignore the fact that we're comparing 8 million people to 320 million. That would be stupid. Just like comparing total production from 1.3 billion and 0.3 billion.
Come on guy, you got to know that it's just pure stupid.
OK, how are the liquidations of housing in China to finance bubbles elsewhere in the world able to avoid a China bust? Got a SWAG anybody? Selling highly leveraged properties in China at anywhere near the rates needed to pay cash for properties in the US, Canada and Australia does not sound sustainable to me but it is purportedly been going on at ever faster rates since the meltdown. This I do not understand.Their three big problems:
a) the copper bubble which was the result of a financing scheme
b) the Ghost Cities as you pointed out
c) black market loan sharks servicing small businesses
These are the result of bad economic planning on the part of the Chinese. All of their fiscal and monetary policy decisions are routinely scrutinized by morons in the West. They really aren't interested in neoliberalism, but continue to pursue oddball policies at times.
The biggest problem in the Chinese financial system are the off balance sheet pools of capital that have been financing construction, particularly residential real estate.
Last year, 42% of all homes purchased in China were second homes.
Chinese industrial growth has been dependent primarily on U.S. consumer markets. As the U.S. middle class is disappearing, there'll be no more demand for Chinese goods.
The only hope China has is to drastically increase workers pay to create domestic demand for goods. This will start to end foreign investment in China as the cost of labor will no longer be attractive.
Investors will look to develop other third world countries that have low cost of labor.
The only thing you can tell is that it's doing better than last year --that's all Y-O-Y means. Maybe this year was good & last year was just OK, or maybe this year was bad and last year was really bad....China had an increase Y-O-Y in industrial production of 7.9%. For comparison, the United States came in at a growth of 3.2%... ...So China is doing relatively well...
On a productivity basis I would suspect so. By the way this is a question not an additional argument: I know Alibaba tried and failed to get listed in the US and the suspected reason was that the Chinese government would not permit non-Chinese auditors to verify the accounting data. Is there any independently verified economic data on China that could act as a check figure on published data?The only thing you can tell is that it's doing better than last year --that's all Y-O-Y means. Maybe this year was good & last year was just OK, or maybe this year was bad and last year was really bad....China had an increase Y-O-Y in industrial production of 7.9%. For comparison, the United States came in at a growth of 3.2%... ...So China is doing relatively well...
fwiw, Isreal's Y-O-Y industrial production change was 11.8%. Are we saying Isreal's factories are more powerful than China's?
Given the example of the levitating JGB over the past 20 years I would not try going short. Afterall Gordan Chang's "The Coming Collapse of China" was published in 2001 and while I have seen confirmations of his trendlines, I have not seen refutations of his data on Potemkin real estate projects, bad debts from the 1980s and perhaps earlier being treated as performing assets and State Owned Enterprises acting as economic blackholes.China is going to hit the wall. No common language, a mix of cultures which can easily be at odds with one another, a communist political system that found itself in the midst of a capitalist revolution that rode the wave but had little idea of what it was doing, growing debt, no real controls (ie: shadow banking), increasingly unable to maintain its position as a low cost manufacturer, inflation and the growing expectations of Chinese citizens that can't be met.
I really like China but it is screwed.
Given the example of the levitating JGB over the past 20 years I would not try going short. Afterall Gordan Chang's "The Coming Collapse of China" was published in 2001 and while I have seen confirmations of his trendlines, I have not seen refutations of his data on Potemkin real estate projects, bad debts from the 1980s and perhaps earlier being treated as performing assets and State Owned Enterprises acting as economic blackholes.China is going to hit the wall. No common language, a mix of cultures which can easily be at odds with one another, a communist political system that found itself in the midst of a capitalist revolution that rode the wave but had little idea of what it was doing, growing debt, no real controls (ie: shadow banking), increasingly unable to maintain its position as a low cost manufacturer, inflation and the growing expectations of Chinese citizens that can't be met.
I really like China but it is screwed.
The official debt is 300% of GDP without counting a suspected 200% of off the books mezzanine debt and 100+% of provincial debt? I do hope you are yanking my chain or the BBC screwed up.
China is going to hit the wall. No common language.
