"How China fooled the world" debt 200% of GDP

TickersPlaysPop

Hi all

I was surprised to not find a discussion thread about the BBC documentary on the Chinese economy. It is a must see for anybody making decisions about investments....

China has debt 200% of GDP... And rising.... It jumped 15 trillion US dollars in just 5 years..... So now you know how they built so many airports, apartments, roads, rail....etc

http://www.bbc.co.uk/programmes/b03w7gxt

The debt bubble moved from the west to China in 2008.... Who are now in debt to the tune of 200% of their GDP.... They had no choice when the west stopped buying their goods they had to borrow to build to keep the people in jobs and from civil unrest... Their borrowing hasn't stopped.... My question is .... who did China borrow from and who can prop up their banks when they fail? Maybe the west can shift their debts to China?

So maybe a world stock market crash around the corner, or a great opportunity for the west?

Generali

TickersPlaysPop wrote: »

Hi all

I was surprised to not find a discussion thread about the BBC documentary on the Chinese economy. It is a must see for anybody making decisions about investments....

China has debt 200% of GDP... And rising.... It jumped 15 trillion US dollars in just 5 years..... So now you know how they built so many airports, apartments, roads, rail....etc

http://www.bbc.co.uk/programmes/b03w7gxt

The debt bubble moved from the west to China in 2008.... Who are now in debt to the tune of 200% of their GDP.... They had no choice when the west stopped buying their goods they had to borrow to build to keep the people in jobs and from civil unrest... Their borrowing hasn't stopped.... My question is .... who did China borrow from and who can prop up their banks when they fail? Maybe the west can shift their debts to China?

So maybe a world stock market crash around the corner, or a great opportunity for the west?

How do you think that compares with debt in the UK or US do you think?

Chinese people save a lot (about 30% of income) so there is plenty to be lent.

Thrugelmir

Haven't had an opportunity to watch the programme yet. Other than inflate away the Westerns world debt bubble over a very long period of time. No one has an answer to the financial markets that have developed over the past 40 -50 years. Hardly surprising China is in the same boat.

MS1950

TickersPlaysPop wrote: »

Hi all

I was surprised to not find a discussion thread about the BBC documentary on the Chinese economy. It is a must see for anybody making decisions about investments....

China has debt 200% of GDP... And rising.... It jumped 15 trillion US dollars in just 5 years..... So now you know how they built so many airports, apartments, roads, rail....etc

http://www.bbc.co.uk/programmes/b03w7gxt

The debt bubble moved from the west to China in 2008.... Who are now in debt to the tune of 200% of their GDP.... They had no choice when the west stopped buying their goods they had to borrow to build to keep the people in jobs and from civil unrest... Their borrowing hasn't stopped.... My question is .... who did China borrow from and who can prop up their banks when they fail? Maybe the west can shift their debts to China?

So maybe a world stock market crash around the corner, or a great opportunity for the west?

To answer your question “who did China borrow from” – according to Robert Peston’s BBC programme you refer to – the answer is the Chinese ‘shadow banking system’.

This FT ‘Opinion’ piece ‘Economic danger lurks in China’s shadow banks’ examines what they are and the possible problems they pose:

http://www.ft.com/cms/s/0/2795839a-8902-11e3-bb5f-00144feab7de.html#axzz2u2dAQdcK

cells

TickersPlaysPop wrote: »

Hi all

I was surprised to not find a discussion thread about the BBC documentary on the Chinese economy. It is a must see for anybody making decisions about investments....

China has debt 200% of GDP... And rising.... It jumped 15 trillion US dollars in just 5 years..... So now you know how they built so many airports, apartments, roads, rail....etc

http://www.bbc.co.uk/programmes/b03w7gxt

The debt bubble moved from the west to China in 2008.... Who are now in debt to the tune of 200% of their GDP.... They had no choice when the west stopped buying their goods they had to borrow to build to keep the people in jobs and from civil unrest... Their borrowing hasn't stopped.... My question is .... who did China borrow from and who can prop up their banks when they fail? Maybe the west can shift their debts to China?

So maybe a world stock market crash around the corner, or a great opportunity for the west?

Why does everything have to be a scam for internet experts to 'spot' or disprove?

TickersPlaysPop

So....

Is 'quantitative easing', or printing money from no real material value creation and dishing it out, is just the next premeditated step in the debt game? I.e. Rather than allow things to go bust and end it, the 'too big to fail' card is played and we are all lumped with paying off huge debts.

This whole financial system and debt is a form of civil control... Keep the masses in debt either directly (from personal loans mortgages etc) or indirectly (via government debt) and working like dogs

Who let the system have the ability to do this? Who did this? It feels like we are all just puppets and muppets allowing the elite to over complicate and perform magic illusions with the financial markets. It seems like nobody really knows what will happen.... But I think nobody wants to admit it.... China will pop, there will be civil riots, huge human rights violations on mass, this will all be covered up, world stock markets will plunge, interest rates in the UK will go up... But commodity prices will drop....? Surely somebody knows what will happen?!

dryhat

Most of the idiots on here don't care, so long as "house prices" keep going up.

DaveTheMus

The people of China are big buyers of gold bullion and have been for years, that will offer the people some protection.....

It's like any national debt nowadays, it'll never be paid off, only repackaged and extended. Debt and trading debt is big business, with the financial institutions charging fees for every trade.

TickersPlaysPop

I think I need to join some sort of finance club or adult education course... I find it all fascinating. If the gold ownership in China helps it surely won't prevent a sudden shock but just reduce the damage?

It would be good to see how many people think China will have a sudden slump that will affect the world financial markets. It almost happened in 2008 before they chose to leap into borrowing huge amounts. I want to shift 10k out of my well matured 10 yr old S&S ISA's and put it back in to a new ISA when the markets are low.

So as far as I understand it.... China are basically printing money from nothing and using it to buy materials on the world market to build infrastructure and housing, and keep their citizens employed. So, why are the world markets happy to accept this? Surely when the world wakes up or doesn't depend on China any more the Chinese currency value will plummet? The thing to precipitate a crash are the bonds that are failing to give the expected returns. Then...we in the west will return to getting cheap goods again, so the Chinese workers go back to manufacturing rather than building.... But they will hopefully have a better standard of living?

SunReader

dryhat wrote: »

Most of the idiots on here don't care, so long as "house prices" keep going up.

Not just here either, google 'china ghost cities', it seems that savers there have been seduced into some very unwise property speculation.

Maybe they put all their chips on win, building for the expected urbanised future and failed to see the impending western financial crisis, or the Chinese government are expecting a property crash and it will be a stealthy redistribution of wealth to the communist workers at the expense of a haircut for the investors?

Seems to me that China is as big a player in world economics as the USA but with even more secrecy and corruption, and they may be in a much worse mess than we are if the truth is ever known.

cells

SunReader wrote: »

Not just here either, google 'china ghost cities', it seems that savers there have been seduced into some very unwise property speculation.

Maybe they put all their chips on win, building for the expected urbanised future and failed to see the impending western financial crisis, or the Chinese government are expecting a property crash and it will be a stealthy redistribution of wealth to the communist workers at the expense of a haircut for the investors?

Seems to me that China is as big a player in world economics as the USA but with even more secrecy and corruption, and they may be in a much worse mess than we are if the truth is ever known.

China cannot over build at this stage.

for instance she needs ~700m high quality homes by 2050 yet today has about 300m homes most of which are very poor and will need to be knocked down and rebuilt.

That means she needs to construct close to 1 million homes per MONTH. To give you an idea of the scale of that...it is a Birmingham every other week

That sounds a tremendous number, absurd even, but it is only a little higher than thr french buold on a per capita basis.

So an empty block or ten is nothing in china. The demand is there for 1 million new homes per month