Posted on 10/30/2018 7:11:04 PM PDT by SeekAndFind
They cannot afford to pay to prop up their inflated yuan. Trump nailed them but the valuation of the yuan has been a sort point with the USG since the nineties.
I saw that. Very illuminating.
CC
this story is misleading.
China has an easy way out.
inflate.
anybody holding the Yuan will lose
In sum: China’s huge growth has justified it’s debt. That growth is slowing, and Trump is hitting it hard with his tariffs.
BTW: China insists that it’s infrastructure projects in other countries be paid for in US dollars.
“Traveling to Shenzhen about a decade ago,”
I traveled throughout China 6 months ago on business. There were tall cranes filling the horizon with building projects. Nobody was working on the buildings. They had the concrete and steel up but other than that they were not finished and no work was being done. These were very large buildings, a standardized construction. I saw maybe 500 buildings.
It was surreal like a scifi armageddon landscape. I asked my host about them and only got that the government wants the rural people to move into the buildings. He had limited English so I didn’t push it.
The obvious financial loss was staggering.
.. YAWN!
Haven’t heard this one for what 2 or 3 days?
Perhaps China can fill those empty cities with Central Americans?
Now, there’s an idea...
And yet China is expanding their navy, taking over and building islands out in the sea, and buying massive shares of Venezuelan crude. What could go wrong?
due to
China uses North Korean slaves and Chinese slaves to run their factories. Ghost cities for manufacturing never activated. There is a limit to slave labor productivity, apparently.
Not mentioned is China’s significant military budget.
Was there in 2015. Same scene with similar designed structures. In the middle of nowhere 30 similar 25-30+ story buildings in clusters dotted the landscape.
For those structures completed often times the surrounding land was not leveled or even paved.
More telling was the lack of clothing being dried on balconies or at windows.
The malinvestment between Shanghai and Beijing was pretty horrifying.
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Thank you, Dennis, for closing the loop on the insane number of construction cranes I saw in China a decade ago.
Communist countries can only accomplish "great leaps forward" by gaming the system. They are good at building a house of cards.
Bureaucrats — even well-intentioned ones muck up things because they disrupt the natural market-driven flow of investment risks and rewards that under-pin a free, capitalist economy.
If Black Swan author Nassim Taleb teaches anything, it's that equity (skin-in-the-game) investments and ensuring a fair playing field (national and international) are the best safeguard against waste, fraud, abuse, and the society-crippling practice of saving companies "too big to fail".
“Chinas collapse will be boon to many other economies when they pick up the slack.”
Or it will be a catalyst for a world-wide war as China tries to control 500 million or so dirt-poor peasants who aspire to the middle class life they see, by blaming the USA for its economic collapse. The middle class will be blamed for being self-interested and unpatriotic.
IMHO, I think the Cultural Revolution will look like a mere spanking compared to the rigorous reordering of China to come.
<><> wasted infrastructure investment in ghost cities, and,
<><> a white elephant transportation infrastructure.
Nobody lives there----and the construction was so shoddy, many of these places are crumbling.
I think the method behind all the construction you saw was the same one driving China to export its goods at any cost, including lending money in any amount. The massive cohort of young, post-cultural revolution Chinese of job-age need to be employed, otherwise China becomes ungovernable. I believe the prospect of such a large number of Chinese in that class without a paycheck frightens Chinas leaders far more than any weapon our military possesses.
Very good point, PUGACHEV.
And if what you say is correct, then the new pressure from the trade war will cause a big crisis. Hopefully the Chinese will relent and allow true capitalism/free markets to come in and save the day.
May cause a new revolution, however.
[The US] will survive without the paltry exports to the Communist country.
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And it’s a wise move to unhinge our economy from theirs so we are less vulnerable than we would be.
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