Chinese Economics Thread

[PopularScience]

It isn't going to happen for Shenzhen, Shanghai, Beijing or Guangzhou and some top tier cities. Migrant workers would never be able to afford that kind of apartment. However, it is possible for second tier cities and below as many of these cities can have average housing prices of 5000 yuan to 20000 yuan per sq meter.

As for top tier cities, Chinese government is using subsided apartment to house them just like Hong Kong and Singapore were doing. Hong Kong has a rental price of 2000 HKD for subsided housing. And China is planning to increase such housing but at bigger space for poorer population.

I know a friend in Xian who eligible for a subsided apartment with half of the market price. Not difficult to get one.

 

[horse]

Well that's at least a suggestion since we are pretty tired of seeing a lot of good folks bogged down in heated arguments over little things and some got even booted out, even though they have some insights and info that we either do not have or overlook, rinse and repeat, so here is at least a suggestion, or a wish, to stop that.

Yeah, exactly.

 

[horse]

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[Minm]

I listened to this during my morning commute. It's amazing to me how easy to is to admit problems once they are too obvious to ignore. The fact that real estate is ~30% of Chinese GDP is bonkers. And the authorities sat on their asses and did nothing for years on end until it blew up in their faces. Should disabuse people of the notion that China is immune to the financial speculation/excess model that the West is plagued by.

Real estate probably never was 30% of the economy. It's actually quite hard to measure how much of the economy is dependent on real estate, but the Rogoff and Yang estimate is probably quite wrong and misleading. What most people think we're talking about is the value of new real estate construction every year and then yes, 30% would be shocking.

But what this estimate actually includes is steel and concrete production estimated to go into houses, property services like maintenance of existing houses etc. The problem with this approach is that it overstates the importance of construction and the consequences of a crisis. For example, steel production capacity that is freed up by lower housing construction can be used for something else or exported. Services are probably less affected by any stop in construction, people still need to live somewhere.

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It shouldn't be a surprise that the Western media all picked the highest estimate available for the contribution of real estate to GDP. That doesn't mean it's truly the best estimate

 

[henrik]

Real estate has been an engine for growth for China for the last 2 decades. No question there is a lot of corruption involved but without the real estate boom, there wouldn't be the great infrastructure development in China and the emergence of many Chinese companies in construction, railway, utility, and even many high tech manufacture firms

China has benefited greatly through the real estate boom. Many regional government has been able to greatly develop and modernize their provinces and cities from land sales and those infrastructure development has also attracted many investment from manufacturers as railway and roads have made transportation cost lower.

Although, it is also true that many local government has become over-leveraged since 2008 and housing has become less affordable ever since. However, the turning point is 2015 when China again tried to crack down of over-leveraged property sector and signal to the property developers to stop from overbuilding and local government from diversify from land sales as the sole source of income.

However, capitals flight, an economy slowdown, and trade wars have forced the Chinese government to abandon the crackdown. As a result, Chinese government gave the property sector another chance to deleverage through shantytowns redevelopment. At that time, the Chinese government has explicitly told property developers that they should take the opportunity as the last chance to cut down debts and overbuilding of inventory. The result is housing price doubles or even triples in a matter of months for some cities.

Surprisingly, the Chinese government took the coronavirus restrictions as a chance of cracking down on everything especially property sector, My guess is that the restrictions prevent those shady businessmen from fleeing the countries. However, the crackdown has put a dent on Chinese economy as pandemic also took a toll on service sector. But the Chinese government probably doesn't have a choice as housing price had gotten out of hand and it is now or never and pandemic actually is the perfect opportunity for deleverage from their perspective.

The crack down on Alibaba, tencent, gaming companies, private tutoring and refusal to print more money, have all contributed to the slowing economy.

 

[Biscuits]

The crack down on Alibaba, tencent, gaming companies, private tutoring and refusal to print more money, have all contributed to the slowing economy.

Recession in China's usual markets is the main reason, all these other measures are to prevent bubbles being created by actors chasing ever increasing growth even as the conditions to create healthy growth aren't met.

 

[TK3600]

but but but, NATO has extremely modern armed forces and very professional and proven forces ... and China hasn't fought a war since 1979 and lost to Vietnam (thats you would hear from western medias and military "experts")

Somewhat true, but NATO suffers the same. Only Russia and Ukraine has up to date peer combat experience.

But that is getting off topic. I only mentioned those in context of economy. Money must get product you desire, otherwise it is unhelpful.

 

[sunnymaxi]

Interestingly, no one has post this

after September, now Data from October month exceed all the expectations.

https://twitter.com/i/web/status/1724608761925689724

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Oct. economic activities:

Surveyed unemployment rate 5.0%[Est. 5.0%]

Retail sales 7.6% y/y[Est.7.0%]

Industrial growth 4.6% y/y[Est.4.3%]

Jan-Oct fixed asset investment 2.9% y/y[Est.3.1%]

In October,

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's total retail sales were recorded at 4.33 trillion yuan, rising 7.6% y/y or +0.07% m/m. Retail sales of goods were 3.85 trillion yuan, which rose by 6.5%y/y..

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's Jan-Oct. nationwide fixed-asset investment increased by 2.9% y/y to 41.9 trillion yuan, +0.10% m/m.

The investments in

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rose 1.4% y/y in Jan-Oct, and the

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industry rose 6.2% y/y, power & water supply +25% y/y..

 

[gadgetcool5]

Alibaba cancels cloud unit spin-off over US AI chip curbs, posts 9% revenue growth amid China’s shaky economy​

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Alibaba cloud unit spinoff canceled because of U.S. AI chip curbs. I believe Tencent also said that the U.S. curbs would affect its ability to sell AI services to its cloud customers. They are hoarding their scarce AI chips for the more important job of training LLM models, apparently.

I don't see how anyone can say with a straight face that this is not the impact of a U.S. policy to suppress China's legitimate economic development, and civilian development. Cloud services are not military weapons, and if they are, then the definition has become such a slippery slope that anything can be called one. Particularly ridiculous since Xi made it clear today that China does not want war with the U.S.

 

[Eventine]

Alibaba cancels cloud unit spin-off over US AI chip curbs, posts 9% revenue growth amid China’s shaky economy​

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Alibaba cloud unit spinoff canceled because of U.S. AI chip curbs. I believe Tencent also said that the U.S. curbs would affect its ability to sell AI services to its cloud customers. They are hoarding their scarce AI chips for the more important job of training LLM models, apparently.

I don't see how anyone can say with a straight face that this is not the impact of a U.S. policy to suppress China's legitimate economic development, and civilian development. Cloud services are not military weapons, and if they are, then the definition has become such a slippery slope that anything can be called one. Particularly ridiculous since Xi made it clear today that China does not want war with the U.S.

I mean, outside of people whose opinions hold no value because they are essentially propaganda, I think even most mainstream analysts recognize that the US is trying to suppress China not just militarily, but technologically and economically. The question is - what are you going to do about it? Getting angry is useless.