Posted on 09/30/2021 9:11:00 AM PDT by SeekAndFind
You don't have to spend much time in China to notice the mystifying glut of half-built apartment complexes, neighborhoods, and even ghost cities. There are certainly legitimate residences getting built, but the buildings I have in mind are concrete frameworks with no doors or window frames. They feature sky cranes and scaffolding but no construction workers. Buildings sit in this condition month after month. China is estimated to have enough unsold "housing" of this type for 90 million people.
These empty buildings are a manifestation of China's enormous property bubble. The real estate sector has grown to at least 25 percent of the county's GDP. This makes China's bubble significantly larger than historic bubbles in, for example, Spain and Japan.
Turmoil at Evergrande, the country's second-largest developer, has drawn attention in the international press. Evergrande's bond prices are now only a fourth of what they were in March.
Although Chinese culture emphasizes thrift and savings, there is no tradition of ordinary people investing in anything other than real estate. They can't invest abroad. Local stocks and bonds have a poor reputation.
The empty buildings are essentially a form of land speculation. Developers must build something on the land, or it reverts to the government after a certain amount of time.
The government runs Chinese banks. They often finance shell projects and unneeded infrastructure as a way of padding GDP statistics. At the beginning of the pandemic, the government responded by encouraging loans of this type. But it later reversed course.
The banks began cracking down on property-related loans a year ago, triggering the crisis at Evergrande. Under the "three red lines" policy, developers must now bring their debt load below specified levels.
Evergrande is not expected to survive an upcoming series of payment deadlines.
(Excerpt) Read more at americanthinker.com ...
Die Chine, Die!
Very interesting. Wonder how it is going to play out?
As the author observes...
Xi Jinping’s policy of shielding China and its businesses from scrutiny could lead to a backlash from foreign investors. Although China has significant savings of its own, such investment still plays a crucial role in the economy, as the dysfunctional property market illustrates.
Fresh from his victory over the pro-democracy movement in Hong Kong, Xi is imposing a dystopian vision on one sector of Chinese society after another. Alibaba boss Jack Ma and the other tech moguls, China’s swaggering elite until just last October, have been brought to heel.
Ma was planning the largest initial public offering ever when the party demanded that he pull the plug. The tech giants have turned over months of profits to the government to show their loyalty. Popular actors have been erased from the internet with no explanation given.
Paid private tutoring on core subjects, such as English, has been banned. Chinese high school students focus their studies on passing the college entrance exam, which once emphasized English. Courses on “Xi Jinping Thought” are replacing those that taught English.
For many years, China focused on economic growth and catching up with the West. Not for the first time, the country has turned inward. This follows a recurring pattern in Chinese history that scholars call “anti-foreignism.” Previous examples include the Boxer Rebellion of 1900 and the Cultural Revolution of the 1960s. The “Great Firewall” keeps foreign influence off the Chinese internet. The communications technologies once thought to be a bulwark of freedom have been repurposed as tools of authoritarianism.
The chamber of commerce types are going to regret the day they participated in the coup and failed to heed Trump's warnings once the CCP nationalizes all of their factories.
There was a need for cheap math tutoring in China.
Math tutoring is going to be expensive now.
The China the?
I have a hard time listening to an author who says things like:
“China’s debt increased to 270 percent of GDP in 2020 at the start of the pandemic. But it has since come under control.”
It has since come under control? Prove it, without using numbers controlled by the Chinese communist government.
“The real estate sector has grown to at least 25 percent of the county’s GDP. “
...
“Although Chinese culture emphasizes thrift and savings, there is no tradition of ordinary people investing in anything other than real estate.”
...
“The government runs Chinese banks. They often finance shell projects and unneeded infrastructure as a way of padding GDP statistics.”
—
Oh, yeah. This shouldn’t be a problem to have China’s economy implode.
Central planning. Government ownership of the people.
China has enough empty housing for 90,000,000 people?
Send the Haitians there.
What really drives he bubble is Chinese men must own property before they can marry. No property, no woman will look at them and, more importantly, the two families will not approve.
There was a need for cheap math tutoring in China.
—
As well as English - teaching jobs by foreigners are on the new CCP hit list.
Ma was planning the largest initial public offering ever when the party demanded that he pull the plug.
—
Before he became parts and pieces in some organ transplant coolers.
the Cultural Revolution of the 1960s was about destroying traditional Chinese culture and showing the Soviets that Mao’s China was an agricultural and industrial powerhouse - eliminating foreign influences was just a side effect.
China has enough empty housing for 90,000,000 people?
—
Almost all of those empty apartments and housing complexes are unlivable and down right dangerous to enter (if entering is even possible), let alone live in.
“Buildings sit in this condition month after month”
You would have to tear them down and start over, I’m thinking.
The Haitians are natural builders.
They could turn those buildings into palaces.
That would be pronounced Lear Estate Bubber.
RE: You would have to tear them down and start over.
Recently, they demolished 15 buildings simultaneously via controlled explosion. See here:
https://m.youtube.com/watch?v=Om6b0_ffyFQ
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