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

chucky

There seems to be a lot of experts on the Chinese economy and demographics and social activity on this forum. We are very lucky to have this intellect sitting behind a keyboard and never visited China.

purch

chucky wrote: »

There seems to be a lot of experts on the Chinese economy and demographics and social activity on this forum. We are very lucky to have this intellect sitting behind a keyboard and never visited China.

If you ever need a heart by-pass, I'm your man....

http://en.wikipedia.org/wiki/Cardiac_surgery


......the picture is most informative :eek:

debbiereynolds76

The issue with China is the CCFD's which are front and center of the whole issue


The deals are being unwounded as we speak - just look at the Baltic Dry to see the mess that lies ahead

chucky

debbiereynolds76 wrote: »

The issue with China is the CCFD's which are front and center of the whole issue


The deals are being unwounded as we speak - just look at the Baltic Dry to see the mess that lies ahead

Thanks for the update Debbie.

cells

chucky wrote: »

There seems to be a lot of experts on the Chinese economy and demographics and social activity on this forum. We are very lucky to have this intellect sitting behind a keyboard and never visited China.

It isn't really a question about china but one of urbanisation

one of the requirements for a nation to advanve and get richer is to urbanised. cities are more productive than subsistence farming communities.

A developed nation temds to go towards 80% urbanisation or even higher.
china is nowhere near this figure so thrre are still hundreds of million of poor people who live in shacks in the countryside and in time (20-50 years) these people will move into the towns and cities.

then there is the simple fact that even once you leave abject poverty you want more housing space and you want to love less densely. France is a developed rich country yet it is still building homes and building them larger than they did in the past. This will hold true in china toom even when urbanisation gets to a high percentage there is the demand for a lowrr occupancy rate.

All of them simply means that at China current stage of wealth and development it is difficult to over invest in infrastructure (which housing is)


whatever happens good luck to them

Generali

debbiereynolds76 wrote: »

The issue with China is the CCFD's which are front and center of the whole issue


The deals are being unwounded as we speak - just look at the Baltic Dry to see the mess that lies ahead

The Baltic Dry Index (BDIY) seems to be trading within normal ranges:

http://www.bloomberg.com/quote/BDIY:IND/chart

Click on the 3 year and it seems to be trading well within normal ranges. If you put 'COPX' in the comparison box, there seems to be no correlation between BDIY and the copper price.

I'd stop reading Zero Hedge if I were you, it's bad for your health.

chucky

cells wrote: »

It isn't really a question about china but one of urbanisation

Ok if you say so.

debbiereynolds76

Generali wrote: »

The Baltic Dry Index (BDIY) seems to be trading within normal ranges:

http://www.bloomberg.com/quote/BDIY:IND/chart

Click on the 3 year and it seems to be trading well within normal ranges. If you put 'COPX' in the comparison box, there seems to be no correlation between BDIY and the copper price.

I'd stop reading Zero Hedge if I were you, it's bad for your health.

What's Zero Hedge a blog or something??

Heres where I got my information from on CCFD's

Bloomberg quoting Goldmans:

http://www.bloomberg.com/news/2014-03-18/goldman-says-chinese-commodity-financing-may-unwind-in-24-months.html

If I have time I will dig out the article about the BDI

SunReader

All of them simply means that at China current stage of wealth and development it is difficult to over invest in infrastructure (which housing is)



China ghost cities: http://www.bbc.co.uk/news/magazine-19049254

But the Chinese are good at 'difficult', and it looks rather like over-investment to me. Citizens investing in unwanted buy-to-lets and replica Paris cities was good for pushing GDP up, but it is unsustainable long term.


Deflation: As the west has tightened it's belt there has been a slowing in demand for Chinese goods, devaluing the Yuan could be their way of exporting deflation but ramping up demand. (not sure on this, but is one school of thought)

Social unrest: Strikes and suicide nets in factories are an indicator of mood of a lot of the unhappy proletariat classes, for many the 'economic miracle' is just and endless succession of 12 hour days without the expected rewards. Giving more freedom to the people only works if they are content.

Disconnected military: Then we have the curious but alarming 'tail wagging the dog' military command structure in China with it's massive increase in spending - I really don't think it is Xi Jinping's finger on the nuclear button. Chinese military leaking pictures of their new stealth fighter when the president Xi was in the UK recently was no accident.


Numbers tell lies: As for official government figures, I am very sceptical of their numbers, the financial 'smoke and mirrors' trickery that the West has been doing for years to near-collapse may be just as bad but better concealed. Like companies that expand too fast, they go bump even faster on the downturn. I think China is in deep trouble.

SunReader

Devaluation of the Yuan: if Chinese overcapacity and Western austerity ratios becomes more acute, maybe as the US and UK try to inflate their way out of debt, the Chinese can deflate even faster and sell more in the process. And if everyone gets their GDP growth the world economy is fixed and we are all hunky dory now?