william the wie
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- Nov 18, 2009
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- #21
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.