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

TickersPlaysPop

cells wrote: »

so what was funding the 15 million or so new Chinese homes per year?

the power infrastructure bigger than Europe and the usa combined?

the transport infrastructure bigger than Europe and the USA combined?

the manufacturing industry bigger than Europe and the USA combined?


the tooth fairy?

Thanks for explaining the per capita idea, I can see what you mean now. I think the first change is more people per property though, because that is the quickest way to prevent homelessness. Also many migrants are living in squats etc.

The funding for the huge infrastructure in China has been debt... money drawn up on computer screens created from nothing. The whole banking system works on this principle, the banking system of the majority of the world. Interestingly Syria is not part of that.

China had to shift to borrow and infrastructure build to keep the population employeed when the global demand for their good crashed in 2008. It would have been a revolution if they didn't keep the people happy. So now they have lots of infrastructure and not much activity to pay it off.... they have empty houses and business units doing nothing, how do you pay the debt off?

Generali

TickersPlaysPop wrote: »

So now they have lots of infrastructure and not much activity to pay it off.... they have empty houses and business units doing nothing, how do you pay the debt off?

I'm not convinced this is as much of a problem as people say. China's population is huge, absolutely massive. About 1 & 1 third billion people. We economists call that 'loads of people'

The UK has a shortage of housing in most people's opinion and has about 220,000 empty houses for a population of about 65,000,000. The equivalent proportion of empty homes would mean the best part of 5,000,000 empty places in China. What size do you claim the problem is?

Wonderlands

prosaver wrote: »

some people say the Chinese were great inventors.
so,
how come they never invented knife, forks, and spoons, just chop sticks.
it reminds me what my
mate said ;
they havnt got the same brain as us,
the invention part is missing, and replace by an extra part in the brain too deal with copying,
thats why their so good at copying,
is that mental or what?

Just FYI, we have to admit that those Chinese had indeed invented something, like gunpowder, compass, etc.
Also as for chopsticks or forks, I don't think there's much you can do with forks that can't be done with chopsticks, but there are things you can do with chopsticks that you can't do with forks. I find chopsticks are often better than a fork or spoon when eatting certain items.

Generali

Wonderlands wrote: »

Just FYI, we have to admit that those Chinese had indeed invented something, like gunpowder, compass, etc.
Also as for chopsticks or forks, I don't think there's much you can do with forks that can't be done with chopsticks, but there are things you can do with chopsticks that you can't do with forks. I find chopsticks are often better than a fork or spoon when eatting certain items.

I agree. Soup for example.

You'll get none of your soup up with chopsticks but you'll get a bit up with a fork.

Wonderlands

Generali wrote: »

I agree. Soup for example.

You'll get none of your soup up with chopsticks but you'll get a bit up with a fork.

It all depends on what you are eating. I am downright uncomfortable eating sushi, for example, with a fork. Just hate it..

cells

TickersPlaysPop wrote: »

Thanks for explaining the per capita idea, I can see what you mean now. I think the first change is more people per property though, because that is the quickest way to prevent homelessness. Also many migrants are living in squats etc.

The funding for the huge infrastructure in China has been debt... money drawn up on computer screens created from nothing. The whole banking system works on this principle, the banking system of the majority of the world. Interestingly Syria is not part of that.

China had to shift to borrow and infrastructure build to keep the population employeed when the global demand for their good crashed in 2008. It would have been a revolution if they didn't keep the people happy. So now they have lots of infrastructure and not much activity to pay it off.... they have empty houses and business units doing nothing, how do you pay the debt off?

The Chinese built stuff they need and want because they don't like being poor

They need 700 million homes and they don't have yet 700 million homes so there is no excess of homes in China in fact they need millions more about a million a month more. Like Ireland which was supposedly one of the biggest of the housing bubble yet they now have a shirtgage of homes

They are near the point of saturation for some industries eg steel plants and that is because the factories to make the end products peak before the end product's (eg you build a brick factory before you build brick homes).

Overall China has done amazingly well over the last 20 years and even if they were to stumble today and just keep their current level of wealth that would still be a tremendous achievement but China will power ahead and become a dominant economy

TickersPlaysPop

cells wrote: »

The Chinese built stuff they need and want because they don't like being poor

They need 700 million homes and they don't have yet 700 million homes so there is no excess of homes in China in fact they need millions more about a million a month more. Like Ireland which was supposedly one of the biggest of the housing bubble yet they now have a shirtgage of homes

They are near the point of saturation for some industries eg steel plants and that is because the factories to make the end products peak before the end product's (eg you build a brick factory before you build brick homes).

Overall China has done amazingly well over the last 20 years and even if they were to stumble today and just keep their current level of wealth that would still be a tremendous achievement but China will power ahead and become a dominant economy

The Chinese didn't just build things they needed, as replicated in Spain. In China they built huge areas in anticipation that the homes would be filled and the economy would support wages to pay the rent or house debt. The result are ghost towns also seen in Spain.

Your overly simplified calculations of population size and homes doesn't reflect reality. Most of the huge population are not in the modern China economy, there are many living the farmer life style as in India. The number of registered homes won't include all of the rural areas.

This is crunch time now, with debt increasing so fast and world demand for Chinese product's not being as high as expected they need to find a way to delay things for demand to increase, so they can switch back to supplying. This is hoped to originate from domestic demand so the population are being encouraged to consume, and hopefully not increase debt even more! What we are seeing is a very bad noisy gear change in their economy, that is threatening to blow the engine up.

TickersPlaysPop

Cells...

Your message sign off still doesn't make sense to me. I think both owners and renters are moving into homes with more people per square meter. There is no reason why owners need to become renters.... owners stay as owners but end up in smaller houses as they move from property to property, and more properties are being rented out because there are less people able to buy them, due to mortgage controls, credit crunch, high value of property, competition between wannabe owner occupiers and landlord investors. Also the number of people per square meter in rental goes up due to higher rents

Your simple reason for the fast increase in rental properties and the decrease in owner occupiers places the blame and reason solely with increasing population size and low building rates. Yes we have needed more houses for a very long time, and it is that point that hugely frustrates me. The free market of housing has not worked, because simple market dynamics should have brought about more building, but it didn't. What we have now is a complete mess that is impossible to fix in a short period. It should be a governmental responsibility and bank of England target to keep wage inflation and residential property inflation in line with each other. And those values should not be the all to frequently abused stat.... the average... we need to use median stats so we serve the majority of the population, NOT averages that contain extreme salaries.

TickersPlaysPop

Are you a landlord Cells?

cells

TickersPlaysPop wrote: »

The Chinese didn't just build things they needed, as replicated in Spain. In China they built huge areas in anticipation that the homes would be filled and the economy would support wages to pay the rent or house debt. The result are ghost towns also seen in Spain.

Your overly simplified calculations of population size and homes doesn't reflect reality. Most of the huge population are not in the modern China economy, there are many living the farmer life style as in India. The number of registered homes won't include all of the rural areas.

This is crunch time now, with debt increasing so fast and world demand for Chinese product's not being as high as expected they need to find a way to delay things for demand to increase, so they can switch back to supplying. This is hoped to originate from domestic demand so the population are being encouraged to consume, and hopefully not increase debt even more! What we are seeing is a very bad noisy gear change in their economy, that is threatening to blow the engine up.

The Chinese are still relatively quite poor what is it the people lack there that makes you think they wont be capable of attaining a western style $25-50k per capita income?

It took Europe about 40-50 years to industrialise. From abiut 1940-1980/90 and we had a recession or two during that period. China pretty much started its journey in the 1990s and it should be fully developed by the 2030s. They are not actually moving much faster or slower than we did. We just have a longer period when we think we were rich 1800-1940 but were actually very poor