Author: UYA

China thinks long-term on financial stability — so should we   [Copy link] 中文

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Post time 2018-7-30 22:42:25 |Display all floors
robert237 Post time: 2018-7-30 21:54
Well that's far less wordy than most of your posts but you give nothing to prove any of your very  ...
Please give some examples of policy, bureaucracy, and red tape to  backup your rhetoric.


To begin with, China blocks foreign social media and other websites and companies who run them, citing national security. Few other countries need to do that.

On personal experience, I have registered corporate entities in few countries (including mainland China), and mainland China tops the list in terms of restrictive policies, bureaucracy and red tape.

This is beyond your world though - you did your career (or whatever) in USA and only retired to China.  

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Post time 2018-7-30 22:50:36 |Display all floors
This post was edited by TruismStrike at 2018-7-31 11:22
UYA Post time: 2018-7-30 16:12
Ok.....
where did you get the figure of 300%?

Ok.....
where did you get the figure of 300%?

Google: Seekingalpha 42 trillion real estate debt. Their article on it is from this month. If I post the link/website it might not get through mods or take longer. Seekingalpha is a business data, stocks, and analytics website not unlike Bloomberg.

I read about this for the last 10 years....
never happened.

It has just been growing for 10 years, and constantly gotten worse. That is why it is so bad now and history's largest bubble by a massive margin... it is insane... History's biggest Ponzi scheme.

Look up ADVchina on youtube. They just did a video this month where they drove through a chinese ghost city built in 2015. Built SO POORLY after 3 years they look like they were made of cardboard and are collapsing. They described how it was so strucutually unsound they didn't even feel safe walking near these entire cities China built only in 2015... Ghost city problem, poor construction quality, poor/over investment has continued and accumulated in Chinese real estate for years. Only a complete incompetent can't understand that the debt this is all built on becomes totally wasted money. Eventually the government can't keep up the Ponzi scheme. Trillions in over valued real estate assets will fall over night when the musical chairs game ends. Millions of people also employed in building also lose their jobs. This begins a chain reaction in the economy leading to recession since real estate is 30% of china's GDP.

How well equipped is China to deal with recession mounted/overleverged with debt as it is at a time of declining trade relations? At the very least it is something the chinese system has never had to deal with.

One day the game of musical chairs ends and China is going to find itself way over leveraged on all fronts. Shadow banking. Corporate lending. Real estate bad debts. Regular state borrowing. And lack of consumer expenditure. You can only fight something like financial gravity so long.

as the OP states, "most of the debt is in state industries".
Easy to absorb and control

Control  doesn't appear be there; they haven't been able to stop the historic expansion of Chinese debt at multiple different levels or in the historic real estate bubble.

It being state mounted debt is a huge problem for China as well. If it has to shutter SoE because of debts millions could end up unemployed which begins a cycle towards recession. Because the Chinese government employs so many people and is so central to the Chinese economy as a whole China would suffer much much more from the central government having money problems compared to the west where the governments themselves are not major players in the economy to any similar degree.

If this was the case....
The US would be buying from them in the first place.

Clearly the world has changed since 1990. China is about 3 times more expensive to produce in compared to 1990. There is only ever more and more financial reasons for companies to begin moving their production out of china to another cheaper place.

This is already happening really. Factories have opened up in Vietnam, Indonesia, and India run by the same Hong Kong and Taiwanese people that hired the Chinese to make iphones. The trade war between the US and China has just accelerated that since it adds another reason to move production out of China.

Are you telling me, the 1.3 Trillion $ American debt, China owns is meaningless and insignificant?

That used to be 2 trillion.  You might lost those 1 trillion forex reserves in a month like CHina did in 2015 if the yuan dips and china tries to prop it up to prevent capital flight. China needs those forex reserves quite literally to underwrite and proper up its own currency... they are not a bargaining tool for CHina.

Considering that is about 1/21 of the overall US debt that isn't enough to have any leverage anyway.

China can't decide when those debts are due or even how much they are in fact worth as the US effectively can.

Also taking in the fact China may easily have as much as 3 times the overall debt as the US when you add shadow banking, consumer debt, corporate lending, and bad real estate debts while being smaller economy... How do you intend to pay for that exactly? Your 1.13 trillion in US debts doesn't even come close to breaking the balance.....

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Post time 2018-7-30 23:19:47 |Display all floors
robert237 Post time: 2018-7-30 17:08
You are incorrect in a very big way.
It was the USA that started imposing tariffs on trade.
That i ...
It was the USA that started imposing tariffs on trade.
That is market manipulation, plain and simple.
China was forced to respond in kind.
The USA is abandoning its claim to supporting free trade, free markets, and worldwide competition.
There is no double speak that can change these truths.

Actually the only double speak is everything you just said.

imgur(dot)com/AZYoWEj

Switch (dot) for . for url to work. Ridiculous censorhip but only way around it. Sourced from WTO.

Pretty clear from the graph that China has by far the highest tariffs between them, the US, and the EU. ALso globally known China has predatory economic practices were it blackmails foriegn compaies that come to China to do business.


Also the EU also has higher tariffs than the US, but much lower than China.


So clearly China is the villian becuiase it is the most protectinist and Trump is the hero for correctly calling out the CHinese BS.


So all of Chinese crap propganda about freed trade crap is a total lie... total double speak becuase in reality no country is as protenticist or has the predtory practices china does.

Pretty clear from the graph that China has by far the highest tariffs between them, the US, and the EU. Also globally known China has predatory economic practices were it blackmails foriegn compaies that come to China to do business.


So clearly China is the villian becuiase it is the most protectinist and Trump is the hero for correctly calling out the CHinese, and to lesser extent EU, BS.


So all of Chinese crap propganda about freed trade crap is a total lie... total double speak becuase in reality no country is as protenticist or has the predtory practices china does. Trump is just calling China out for its clear abusive practices ad US tariffs are just leveling the playing field for the US against abusive CHinese.



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Post time 2018-7-30 23:45:46 |Display all floors
robert237 Post time: 2018-7-30 18:58
In the past few decades China's economic growth has dwarfed that of the USA.
And now you want to a ...
In the past few decades China's economic growth has dwarfed that of the USA.

And now you want to argue that the western model is superior to the Chinese model in long term growth.


Wrong on both accounts. For starters easy for China to grow when it started so far behind. Raw % points doesn't really tell the whole story.

For example in the last quarter the US just grew at 4.1% compared to China's 6.7%, but the US economy is much bigger than China. 4.1% growth of the US's 19.4 2017 GDP is an effective growth of .7954 trillion while China at 6.7% growth with a 12.2 trillion economy .817 trillion

So China isn't really effectively growing compared to the US anymore.

If you look back and apply this China also wasn't even catching up to the US until 2010 because it was only around then China had half of the GDP of the US so having twice the growth rate or more actually meant it was catching up.

US has trended back toward 4% growth since 2008  while china is heading the opposite direction, growing older (1/3 of chiense with be elderly by 2050), has the worse real estate bubble in hisory, and is actually riddled with more debt than the US relative to GDP between the corporate debt, shadow baking debts, bad real estate debts, and regular state debts.

Also the chinese model can't be superior to the west because the chinese model has only worked because of/required the west to be their best customers in order for it to work... which in requires a developed wealthy west.

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Post time 2018-7-30 23:50:14 |Display all floors
robert237 Post time: 2018-7-30 21:14
So how can you reconcile your previous statement in this thread ""China practises much more protec ...

Because Chinese tariffs, not to mention lots of other polices that abuse non Chinese companies that come to china related to IP,  are much much higher. And have been for decades.

imgur(dot)com/AZYoWEj

Chinese complaining about Trump tariffs is really the pot calling the kettle black. China having higher tariffs to begin with, among other abusive practices, is how this started.

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Post time 2018-7-31 05:56:07 |Display all floors
Time to change the WTO rules that allows China to impose a 10% tariff because they are a so called developing country when in fact they are the worlds 2nd largest economy.

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Post time 2018-7-31 10:57:15 |Display all floors
TruismStrike Post time: 2018-7-30 22:50
Google: Seekingalpha 42 trillion real estate debt. Their article on it is from this month. If I ...

Someone did their homework

Not like others here who just make claims with no support.

How "objective" are these sources?
Western "think tanks"?

I stand by and support what the OP has to say.
Very curious how things will turn out.
(for China and the world)

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