A $5 Trillion Property Bust in China has Huge Implications for Commodities
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31 comments on A $5 Trillion Property Bust in China has Huge Implications for Commodities
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31 Comments
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2 years ago
Trivial point… but Australia (and US, UK, Canada, New Zealand) are the Five Eyes intelligence group. Not everything gets shared, probably until now Australia hasn’t had to have any secrets about nuclear sub propulsion so they didn’t get that information. However, I don’t see how that’s an issue for the future. Call me naive, but I think the last thing you want is a nuclear sub in Sydney harbor being run by people who don’t really know how it works.
What will be interesting to see is what New Zealand does. Last I heard they had a policy against US nuclear-power ships visiting. I’d be slightly surprised if they didn’t pony up for a nuclear sub or two in the fairly near future.
2 years ago
Chinese home ownership is 98%, but China will continue building the equivalent of San Francisco’s housing stock every month–to house newly urbanized country folk.
Evergrande’s problem is simply a maturity mismatch: it has $350 billion in assets and $305 billion in liabilities. In a red hot economy, that should be easily worked out.
2 years ago
That all depends on whether the assets are actually worth $350b, now, doesn’t it? No one has ever inflated the value they claim for there assets, certainly, so I’m sure Evergrande’s assets can easily be liquated for $350B.
2 years ago
Whispers in my office from a Chinese co-worker is China is looking to become more isolated: neither importing, nor exporting. This certainly would hurt the West because high levels of debt can’t handle the shock of a cut off supply chain.
2 years ago
If this were true, the debt problem would have less to do I think with supply chains than with Chinas reduced need to sterilize currency moves by buying Treasuries
2 years ago
Sounds like a good thing to me. China doesn’t export: jobs come back to US, or Vietnam and Phillipines anyway. Seems like the Chinese factory rats will get screwed. China doesn’t import: except for Australia, who cares? Also, US movies won’t have token Chinese characters and simplistic characters that don’t lose in the translation from West to Chinese. I have to say, I won’t miss the endless explosions in movies either, it will be good to see some plots and acting for a change. You’d think China would have some phobia about explosions considering WWII, but perhaps the Japanese didn’t bomb that much and relied on small weapon genocide. In the end, China won’t be trying to colonize Africa and its influence in the world in all other ways will go way down. If this is true, which I doubt.
2 years ago
It would make sense if they’re preparing for war.
2 years ago
Winston Sterzel claims just that.
link to youtube.com
2 years ago
Maybe china is looking at the us and figured they need to address their economic issues before they end up like us.
2 years ago
Looks more and more like Xi was appointed by the hardliners in the Chinese government who favor global expansionism and confrontation. The era of Chinese stability and growth is over. Things can change quickly and have.
2 years ago
Say it ain’t so.
2 years ago
History tells us a lot about China. An early civilization, and a world power for 2000 years with numerous technical and cultural advances, trading etc until the 19th century, when western imperialism devastated its culture and eliminated its autonomy–aka the Opium Wars. I suspect the impact on national psyche continues in Xi’s plans for global domination.
2 years ago
I got the feeling that since Xi declaired himself president for life in 2018 that things have been getting more and more erratic politically and economically. Did his takeover cause the crisis or did he takeover the country to head off a crisis? Without the building sector China’s growth drops way down. That happened in Japan in the 1990’s and to us after 2008. After Japan’s bubble much of the expensive real estate they had bought in the US in boom times were offloaded at big losses sometimes to the previous owner. How much of the world’s runup in real estate is due to Chinese money and I wonder if it was wise for large corporations to pay ridiculous prices at what looks like the top of the market? I am keeping my eye on these actors. They are not geniuses although they think they are. They just followed the trend.
2 years ago
….I noticed I got censored a couple of times today , never happened before…Got new woke AI eliminating comments now ? I do recognise I am a bit foul mouthed occasionally, but what the heck, we re among ‘frents’ here aren’t we ?
2 years ago
It just happens….it happens to me all the time. Yes, you’re among friends.
2 years ago
My most profound and brilliant posts never show up leaving only the ordinary and boring ones. It’s a curse I must live with.
2 years ago
I’d say, write a book with your most brilliant comments. Don’t let them go to waste! 🙂
2 years ago
Are you really being censored? Or, did you edit the post, and have it “sent for moderation”, i.e. sent to a black hole, never to be seen again? For some reason, edited posts sometimes vanish. Edit them at your own risk.
2 years ago
You must be using the tor browser, and your post is relayed through USA, and is grabbed and read by the NSA. They find them most interesting. 🙂
2 years ago
Australia had five, or was it six? , Covid deaths, therefore imposing harsh discriminatory medical fascism upon its people….what a fn ‘craizy naition’ !’
2 years ago
Looking forward to GodfreeRoberts All Is Wonderful In China comment.
Never mind the 50 million to 90 million VACANT (shoddily) built apartments where most of China’s j6p wealth stored.
2 years ago
“This looks ominous.”
…
Yes.
I’ve been following the China situation closely and – unless some major reversal soon – THE Domino that commences the long due global correction.
Xi’s comments on wealth inequality and unification with Taiwan makes me wonder if he feels time is now to get things in order.
2 years ago
Taiwan and social discontent as distractions from CCP incompetence? The big question, of course, it will Biden stand by Taiwan.
2 years ago
Why would China tear down housing when so many people need housing? The government could take over defaulted housing, have a lottery for the neediest people, and do long term equity sharing with the new resident owners.
2 years ago
it’s well known that when china sneezes, the world catches a cold.
2 years ago
Actually, it is well known that when China engineers viruses in a lab, the world suffers millions of deaths.
2 years ago
With buildings/urban environments this ugly, the best solution is not a ‘hard landing’ but complete destruction and starting over.
2 years ago
We always knew there had to be a hard landing for Chinese real estate.
I mean…..It’s been a really long time coming, but there had to be a bust at some point.
It should have, would have happened long ago without so much continual juicing from the CCCP and the Chinese banks. Now we have a huge number of Chinese who have most of their net worth in their apartments and speculative RE…who are going to find out that markets don’t just always go up forever.
Never mind Australia…..what is going to happen inside China when all that nominal wealth goes up in smoke?
How much will the contagion spread? How much western investor money will go poof?
2 years ago
Aussies need a good recession, maybe a depression, to shake them out of their obedient covid slumber.
China is more free than Australia right now.
2 years ago
US needs a good recession too!
2 years ago
“China is more fee than Australia right now.”
And I’m the rightful heir to Edward Longshanks.
Please don’t make comments that make me blow coffee out of my nose.