Chinese Economics Thread

[manqiangrexue]

Foreign Policy article about the chinese real estate market

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Alot of people in the TV and internet say that china´s real estate sector is too big (about a quarter of the nation´s GDP), and that despite the government crackdown on the real estate sector, prices are still high. If prices are still high, why are they trying to prop up the market again?

First mistake = you believed an article written by Western media about China.

Second mistake = you went wild with your imagination creating random questions to sound inquisitive and intelligent while those questions are actually illogical and stupid. For example:

Which leads IMO to another question: was the economic growth from the last 10 years real or was it largely asset bubbles growth?

No, the better question is, is there any substance in the Westen economy at all or is it all just a room of circle-jerking frauds managing a house of cards built on imaginary stocks and fiat money?

And what about the future? will china be able to have economic growth within its economic fundamentals (without government stimulus or bubbles)?

And in the future, how long will said house of cards stand until it is completely knocked over by the realization that is is the latter instead of the former?

 

[horse]

Foreign Policy article about the chinese real estate market

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Alot of people in the TV and internet say that china´s real estate sector is too big (about a quarter of the nation´s GDP), and that despite the government crackdown on the real estate sector, prices are still high. If prices are still high, why are they trying to prop up the market again?

Which leads IMO to another question: was the economic growth from the last 10 years real or was it largely asset bubbles growth? And what about the future? will china be able to have economic growth within its economic fundamentals (without government stimulus or bubbles)?

Forget about the narratives for a moment.

Just as the basic question. What does the real estate market in China represents?

The real estate market in China is the single biggest asset class in this world. That is the Chinese real estate market.

Naturally, some other things should come to mind, such as the real estate market is where the savings went. Chinese tend to be savers, instead of leaving the money in the bank account, or underneath the mattress like we do in the West, the Chinese savings were plowed into residential real estate.

Real estate is a form of savings, and a base of collateral, which makes it a avenue for further loans, ie capital. Savings = capital, blah blah blah, as expected.

Real estate, is illiquid. Meaning, the price just does not fluctuate that much. Look at the NASDAQ, it is like 50% lower than a year ago? Maybe. Who knows, who cares because it will be somewhere else in price a year from now. We cannot say that for real estate, prices will not be all over the place.

The premise is that real estate prices generally are not subjected to the emotional whims that are the stock market. Real estate pricing tends to be more stable.

Therefore, what props up Chinese real estate prices? The answer is Chinese savings.

Where are Chinese savings generated from? Economic growth!

At this point, now we can talk about the narrative.

But the problem is, I do not even know what the narrative is trying to say?

If they are saying, that the whole thing, the world's largest asset class, is entirely fake, guess they have a right to say that.

Whether that is true or not, depends on who we talk to. Speak to some inform China hand, and they will say one thing, talk to an Indian or comrade Chang, they will say another thing.

As a general principle, if the narrative is fake, no point in pursuing it.

How do we know if a narrative is fake? Education is the answer.

 

[horse]

The CCP has a curious problem with the high valuations of the Chinese real estate market.

Back in the day, the problem was the the Chinese saved too much. They did not spend, and there was no stock market to invest in.

Fast forward a few decades.

Now the problem is that the Chinese still save, but that savings are put into the mortgage payment.

Even with a stock market, most savings wind up in real estate.

Remember, savings = capital.

What is better, the capital going into something real estate, or funding some high tech company?

That is the curious problem.

China is always dealing with 3rd world problems. China is always dealing with 1st world problems, both at the same time. LOL.

 

[horse]

That is why I find those narratives on the Chinese real estate market so puzzling.

Because it is self-contradictory.

1. They are suggesting that the real estate market is propped up by the government. That is false. The government don't have that kind of money.

2. If there is a problem with the Chinese real estate market, in that savings that are turned into capital, that could be funneled into more productive uses, suggests that the world''s biggest asset class could be improved and made more efficient.

You see, this one narrative, has two messages. One is that it is fake, so China is poor. Two is that they screwing this up with inefficient allocation of capital, and with the Chinese real estate market being the biggest single asset class in the world, this like saying they rich but stupid.

So, the narrative is suggesting third world conditions, and intractable first world problems, at the same time, on the same topic, real estate.

To me, it is quite confusing. The narrative should not be confusing. The narrative could be bullshit, but simple and straightforward, haha!

I think this is all from the Indians.

 

[ansy1968]

That is why I find those narratives on the Chinese real estate market so puzzling.

Because it is self-contradictory.

1. They are suggesting that the real estate market is propped up by the government. That is false. The government don't have that kind of money.

2. If there is a problem with the Chinese real estate market, in that savings that are turned into capital, that could be funneled into more productive uses, suggests that the world''s biggest asset class could be improved and made more efficient.

You see, this one narrative, has two messages. One is that it is fake, so China is poor. Two is that they screwing this up with inefficient allocation of capital, and with the Chinese real estate market being the biggest single asset class in the world, this like saying they rich but stupid.

So, the narrative is suggesting third world conditions, and intractable first world problems, at the same time, on the same topic, real estate.

To me, it is quite confusing. The narrative should not be confusing. The narrative could be bullshit, but simple and straightforward, haha!

I think this is all from the Indians.

bro That is why the Indians are so good in Mental Gymnast, with Vedic system being taught, 4-5 = 20 there is no division and subtraction, so it bungles the mind and the American seems to prefer this system and Sunak (being of Indian descent) is going full blast as a way of giving something back to UK...lol

 

[sunnymaxi]

https://twitter.com/i/web/status/1612992104590118912

https://twitter.com/i/web/status/1613044648607625217

 

[BoeingEngineer]

.
China is about to over take japan as the world's top auto exporter.

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[horse]

.
China is about to over take japan as the world's top auto exporter.

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Yeah, this is pretty sudden.

2 years ago, that was an idea no one thought of.

1 years ago, that was still an outside of the box kind of idea.

0 years now, like, holy shit!

China speed!

Time for more bans made in the USA! More Indian talk about China collapse. More EU talk about the so-called threat caused rise of China, then do nothing but talk some more about the so-called threat caused rise of China. More silence from Japan, unless their master tells them to say something. Eh. Refrain from commenting on the Koreans this time. LOL.

 

[supercat]

https://twitter.com/i/web/status/1613044648607625217

I think Goldman is right. Chinese GDP growth this year has been underestimated.

https://twitter.com/i/web/status/1613275596867670018

 

[tphuang]

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There is something that's been happening for a while now. Chinese companies building factories in Mexico to get around tariffs and to have better access to American market.

Santa Catarina industrial park apparently has many Chinese businesses according to a friend of my. For those who don't know, Monterrey is a large city in Northern Mexico that hosts many large American businesses. It is also probably the wealthiest city in Mexico. Or at least it was when I last visited there.