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Chinese Economics Thread
- Thread starter Norfolk
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It depends on where. For the first tier cities, not that much. For many 4 and 5 tier cities, many home prices are down more than 30% to 40%. East coast has fared well and down less. Central plain home prices are down more.I would like to ask, how much did average home prices in China decline from their peak?
I see. Are house prices in 1st tier cities still too high for most residents? I've seen some charts before that said that the house prices in places like Guangzhou and Shenzhen are several times higher than the average salary.It depends on where. For the first tier cities, not that much. For many 4 and 5 tier cities, many home prices are down more than 30% to 40%. East coast has fared well and down less. Central plain home prices are down more.
And also on a related note, what's the situation with wage growth for this year and last year so far?
First tier cities home prices would forever be not affordable. It isn't something you can fix and should fix. People want and desire to move to the first tier cities for all the opportunities, entertainment, and services. It is like most of Japan home prices have been going down for 2 decades but Tokyo home prices are still going up. It is not something that you can do much about.I see. Are house prices in 1st tier cities still too high for most residents? I've seen some charts before that said that the house prices in places like Guangzhou and Shenzhen are several times higher than the average salary.
And also on a related note, what's the situation with wage growth for this year and last year so far?
Wage for manufacturing sectors have been going up but other services sector don't go up as much. Government crack down on video games, fintech, tutoring, and property are putting wage pressure on those sectors. China's labor has peaked so in the long run wage growth would go up as faster pace than now.
But aren't high house prices a factor in why birth rates are so low? If it is an unfixable problem, what are other ways to mitigate the impact?First tier cities home prices would forever be not affordable. It isn't something you can fix and should fix. People want and desire to move to the first tier cities for all the opportunities, entertainment, and services. It is like most of Japan home prices have been going down for 2 decades but Tokyo home prices are still going up. It is not something that you can do much about.
First tier cities are for people to pursue their career. These cities only represent little more than 5% of China's population. It is always the rural and suburban that are the mainstay of birth. If China could keep most of its second, third and forth tier cities affordable then property prices wouldn't be a factor of having more children.But aren't high house prices a factor in why birth rates are so low? If it is an unfixable problem, what are other ways to mitigate the impact?
Ahh, I see. So with the massive declines in home prices across many lower-tier cities, does that bode well for the birth rate in the long run?First tier cities are for people to pursue their career. These cities only represent little more than 5% of China's population. It is always the rural and suburban that are the mainstay of birth. If China could keep most of its second, third and forth tier cities affordable then property prices wouldn't be a factor of having more children.
China's economic system is a hybrid one, the world's very first that achieves that high a level of GDP using a mixed controlled state sectors and a free market coexisting together. That's one of the reasons all Western expectations based on their current textbook theories failed to predict China's trajectory, as their experiences are all based on either so-called free market systems, or purely a command economy, like what China and Soviets used to be. China is neither, and at the same time, both. So they will never get it right when it comes to their expectations and predictions about China's trajectory; they don't understand China. China's hybrid system has now what we called a flywheel effect, some in west are still in denial about this fact and trying to jam the flywheel in every possible ways imaginable.
Housing in China is hybrid, is supply based, not like in west where housing is more or less demand based. Land supply in China is limited, especially along the seaboard. Main player is fiscal budget, but one can say for sure China has its own form of monetary dominance, whereas US is gradually sliding into their own form of fiscal dominance, putting actual cash into general populace hands, leading to worrisome inflation, as feds failed to soak them up in a form of portfolio. China can split housing in 2 forms; one is the usual upfront expensive land sales with no follow on property taxes, the other one with cheaper land sales, just like industrial ones, but you'd need to pay yearly property taxes, which the local governments match it up with bonds sales and coupon payments. Chinese citizens would not be able to have a cake and eat it as well. These fiscal budgets go into a lot of social and infrastructure projects. China's property sector would never go boom, as it is a hybrid, not like those in the west, where free market effed everything up while watchers on the wall were caught napping.
So public has to choose which is it, as money has to come from somewhere to finance what is needed for social programs, including birth rates. As it is, there are already too many people in China. If China can maintain its current level, that's the best scenario, if not, there are some pluses to it as well.
Housing in China is hybrid, is supply based, not like in west where housing is more or less demand based. Land supply in China is limited, especially along the seaboard. Main player is fiscal budget, but one can say for sure China has its own form of monetary dominance, whereas US is gradually sliding into their own form of fiscal dominance, putting actual cash into general populace hands, leading to worrisome inflation, as feds failed to soak them up in a form of portfolio. China can split housing in 2 forms; one is the usual upfront expensive land sales with no follow on property taxes, the other one with cheaper land sales, just like industrial ones, but you'd need to pay yearly property taxes, which the local governments match it up with bonds sales and coupon payments. Chinese citizens would not be able to have a cake and eat it as well. These fiscal budgets go into a lot of social and infrastructure projects. China's property sector would never go boom, as it is a hybrid, not like those in the west, where free market effed everything up while watchers on the wall were caught napping.
So public has to choose which is it, as money has to come from somewhere to finance what is needed for social programs, including birth rates. As it is, there are already too many people in China. If China can maintain its current level, that's the best scenario, if not, there are some pluses to it as well.
It would take more than just lower home prices to drive up birth rate but it is a start.Ahh, I see. So with the massive declines in home prices across many lower-tier cities, does that bode well for the birth rate in the long run?
Apple Makes Plans to Move Production Out of China
In recent weeks, Apple Inc. AAPL -0.34% has accelerated plans to shift some of its production outside China, long the dominant country in the supply chain that built the world’s most valuable company, say people involved in the discussions. It is telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam, they say, and looking to reduce dependence on Taiwanese assemblers led by Foxconn 2354 4.05% Technology Group.
Turmoil at a place called iPhone City helped propel Apple’s shift
Coming after a year of events that weakened China’s status as a stable manufacturing center, the upheaval means Apple no longer feels comfortable having so much of its business tied up in one place, according to analysts and people in the Apple supply chain.
“In the past, people didn’t pay attention to concentration risks,” said Alan Yeung, a former U.S. executive for Foxconn. “Free trade was the norm and things were very predictable. Now we’ve entered a new world.”