China About to Screw Your Life Again

by Simon 28 Replies latest social current

  • mickbobcat

    The US has become addicted to the cheap labor of China. they make a lot of junk some good stuff but by cheap labor sometimes forced. The same liberal idiots who cry about slavery some 165 years ago in the US that we fought a war to get rid of is still being used by China and the same useful idiot liberals are lovers of China. If communism was ever introduced here, these same idiots like Hanoi Jane would have a bullet put in her skull and the invoice for the bullet given to her family. Liberals are some of the most stupid people on the planet.

  • zachias

    "Too big to fail?".. so was General Motors.

  • zachias

    It is a classic situation. If this massive corp goes arse up and the spin on effect starts to run there is then a likelihood of war as in times of financial peril governments will manufacture 'a threat' to be dealt with.

    But as the queen of England Elizabeth the 1st said "it is very easy to start a war but you dont know how it will end."

  • Simon

    This describes the scale of the Evergrande threat and what a bubble the Chinese property market has been:

  • fulltimestudent

    The question of why, this crisis occurred has still not been answered. But, the answer is quite complicated.

    First, here's a National Geographic video showing what happened to a village called Houtouwan, on Shengshan Island on the coast of Zhejiang Province. The village, only 49 Km from Shanghai, once with more that 2000 inhabitants, is now nearly deserted with only a handful of people living there. Why?

    The answer will tell you a lot as to how Evergrande and other developers became so big, All the inhabitants left that village for better jobs in a city.

    This has been one of the largest movements of people in history. In 1949, at the last census held by the Nationalist government of the GMD (KMT), it was calculated that China had a population of about 450,000,000, of which only about 90,000,000 lived in cities. In 2020, the urban population had grown to nearly 920,000,000. That's an increase to the urban population of about 830,000,000. Some sort of housing had to built for all those people. Imagine that - to try and place that in some sort of context, it's like replacing all the housing stock of the USA - NOT just once, but 3 times.

    If that seems a huge undertaking, consider that in the first 30 years of the PRC, urban housing was mainly focused on replacing the hovels that so many city-dwellers lived prior to 1949, The massive growth of city populations only accelerated after (circa) 1980.

    In addition to that, a middle class began growing from roughly the same time, Today, the Chinese middle classes are thought to be around 400 million - larger that the entire population of the USA. As the income of these people increased they also wanted better housing.

    The development of high rise apartments really only started in the early 1990's, Australia's former Prime Minister John Howard visited Shanghai in (I think this was the occasion) 1997. In his hotel (opposite the then new developments in Pudong) his staff opened the curtains of his room, to reveal the new highrises (mixed office block's and apartments) and Howard reputedly, was shocked and exclaimed, "Shit!! How long has this been going on?"

    In 2001 I made my first visit to Shanghai. A local Chinese friend allowed me the use of a small apartment in a high-rise block in Pudong. And this is my criticism of Chinese housing -the apartment was clean, but rather basic, but what surprised me was the general shabbiness of the whole block. It looked as though they had done no maintenance on the common spaces (public areas) from the time it was built some 7 years prior. I know* that in apartment blocks, you've got to keep the maintenance up or it soon deteriorates. At that time it didn't seemed that anyone cared about maintenance. Maybe its changed, 5 years ago (in Suzhou) buildings seemed to be better cared for.

    It was in the first decade of the 21sts C that the building boom really grew in China.

    The developers of these blocks are private enterprise, not government-owned companies. And, that's one of the problems. As Sydney (Australia) is finding out. private enterprise companies will often take illegal short-cuts. Here, in Sydney there are a number of high rise apartments, where the builders did not build to regulations and the blocks have developed structural problems.

    The problems in China, are not structural (as far as I know) but financial. Developers (it also happens here too) ask for substantial deposits and then don't deliver on time. Management have not kept their eyes on the company's financial position, hence these problems.

    Even with this huge building program, urban poor still have problems finding accommodation. This 2019 video by the HK based South China Morning Post, tells their side of the problem.

    Where Beijing's 'bottom of society' live -

    To stop Beijing getting too big, the government is building a new model city about 60 km away called Xiong'an, connected to Beijing by highspeed trains

    *I Look after maintenance in the block where I live, and once worked in the fit-outs of buildings.

  • Simon

    Measuring economic success based on "growth" makes these things inevitable, or at least more likely.

    Whatever you measure you get more of, and at some point if it can't be real then it will be faked.

    Spain had the same thing where they were building places that were just ghost towns.

    It's a form of economic fraud. Someone took at that money.

  • fulltimestudent

    I'm not sure how to compare the Spanish (with a population of less than 50,000,000) experience, which was not backed by a huge mass movement of population, with the Chinese experience (and a movement of more than 800,000,000).

    I'm reasonably sure that these private, Chinese companies, acting as developers, would have made serious errors of judgement, at times. and built tower blocks in town and cities that never sold. On the other hand, they made a lot of money in the cities where the mass-migration landed

    But, is a voluntary decision to invest in a development, really 'fraud'?

    One point I didn't mention about the general situation in China, is that as millions were lifted out of poverty, some were not - and for the last few years the focus has been on lifting the remaining few million living in extreme poverty, out of that situation. Not by helping them to live in cities, but by improving their incomes and housing in village situations. Not much help for a company like Evergrande. The possible real problem for Evergrande is that the Owner and his management team took their eyes off the ball. And, now he pays the price for that mistake.

    But is the Evergrande hassles really going to affect the world? ere's an opinion by a guy called David Goldman, Apparently a Republican voter (who says he voted for Trump 5 years ago) He was once a N.Y. financier with strong links to Israel, who, a few years ago, bought the Asia Times and based it in Hongkong. I understand he has good connections all across the business world.

  • waton

    well. china has let the hostages go, has banned bitcoin the super polluting, criminally loved payment vehicle,

    hopefully they will keep it up and turn over the infrastructure they have build in the east china sea in the acknowledged economic zones of neighbours like the Philippines, to the locals, as the next step forward in the right direction.

    turn the screws to lift.

  • Anony Mous
    Anony Mous

    China’s problems are entirely its own making.

    They had massive inflation over the last 20-30 years, so people didn’t trust their own currency, as a result China started massive infrastructure projects, buying up massive debt from the US and EU and basically started issuing US/EU IOU’s as payment.

    The market responded abroad by moving industry there, because, free infrastructure, people in China noticed and started buying real property instead of saving money because a house is always worth the new valuta if money in the bank is not worth anything.

    But there are too many Chinese so the government, being in control of the economy, had to build more than the government could afford to build in places they had already built infrastructure for the too many companies they had attracted with too much free infrastructure, so many cities basically got into an infinite loop of companies building more stuff requiring more complex infrastructure in unsustainable locations.

    This is only compounded by the facts of history like the one child policy that there aren’t sufficient people being born to continue the economy. There is also the facts they had to divert massive water and energy sources from interior in China to the coast cities (they built everything on the coast, because access to international shipping). This redirection is hugely damaging and the majority of Chinese cities are now facing water and energy shortages.

    So now we are at a point in time where it is unlikely all those US and EU debt IOUs will be worth anything. But everyone in the infrastructure/real estate market has been paid with those IOUs.

    The other thing people started investing in, especially in China was Bitcoin, because if government fiat money isn’t worth anything, a real money (like gold and Bitcoin) is. Hence the government crackdown over there, because they see more money being circulated in real money than their fiat money. It’s the same reason the US has made gold illegal from being used as a payment, because if nobody trusts the government money, they will be broke.

  • Simon
    has banned bitcoin the super polluting, criminally loved payment vehicle

    You may want to do some research instead of spouting the institutional propaganda.

    Bitcoin is surprisingly green and can enable renewable energy to be economically viable. It uses waste energy whenever possible because it's incentivized to do so which makes direct energy-usages vs green-ness not obvious.

    Start by looking into how much energy the traditional financial systems use.

    Also, the "used by criminals" has also been debunked. The things that criminals use most are high denomination US dollars, the notes that serve no purpose to regular society. Most crypto is on an open ledger which makes tracing payments easier.

    China don't like it because it gives people economic freedom and removes their ability to control people and the whole financial system. It provides economic freedom and wealth transfer to people who are unbanked or disadvantaged by the current financial systems and from political control.

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