broadsword
Brigadier
I hope to see the property prices either to stay depressed or rise much slower than the people's income. That should have been the way from the outset.
Chinese Economics Thread
- Thread starter Norfolk
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proelite
Junior Member
Day or two after stimulus announced, I'm seeing a ton of low quality articles recycling old talking points being released without mentioning the stimulus.
This CIA funded operation is getting too on the nose.
This CIA funded operation is getting too on the nose.
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Do not really agree with what you are saying, but it is a moot point now, this whole discussion I feel. Things changed this past week. The stock market went crazy, so everyone knows it is a new day.
If we do continue this discussion, then I think I would address it in two ways.
1. This sounds like systemic risk China style. Suppose the loans to the tech companies do not pan out? Then what?
Tech companies are in inherently risky businesses. Look at the United States, they gave money to Intel, and they laying people off. In China, the banks loaned money to a safe business, uh, the real estate, and it did not work out that way as totally safe. If real estate was not exactly safe for the banks and its loans, then we have to believe tech will be riskier.
Bad loans to the property market, then if the tech loans go bust, then there will be declining property market, ailing banks, and tech busts. That is almost like everything. The general idea is that we try to avoid systemic risks. Having the stock market allocate capital will help to spread out the risks.
2. The banks had to finance the tech in China, because the stock market was not doing its job. That is the whole point of capital markets, allow the market to make those decisions. Relying on the bank to make those decisions, that is like going back in time, and the communist will do that.
Probably not a lot of the illegal assets were in real estate. Properties must be registered under real names. Or they would risk losing their assets to the proxies. For those who embezzled or took bribes of hundreds of millions, if they had spent majority of the amount in real estate, they would have required a whole team to manage all these properties across the whole country.
Total A-share purchase by "National Team" (predominantly Central Huijin Investment, China Securities Finance Corp, and SAFE investment vehicle), had hit RMB3.2trn (US$440bn) by 2Q2024, according to Securities Times.
I certainly was not referring to you as the 'idiots' in my original post - as you clearly did not argue against the notion that stimulus was necessary. In this sense I certainly believe the term 'idiot' was appropriate given the deeply unserious and clearly mistaken understanding of the underlying situation and the subsequent policy announcements this week (PBoC Monetary Policy and the subsequent Politburo readout). In Chinese, this is what we refer to as 啪啪打脸.
The important thing here is not the $ that they've announced - the important thing is that this is now a political issue at the highest level of the decision making apparatus.
Read the press release:
Housing prices should stop dropping and stabilize -- those who kept arguing that housing prices needed to drop further - should reflect on why the Politburo disagrees with you and instead thinks housing prices need to stabilize. This is the "whatever it takes" Mario Draghi equivalent statement that they are going to stabilize the housing market - the dollars they've announced is irrelevant as they've indicated they are going to achieve this.
If you believe otherwise, you are basically saying you doubt the political commitment/credibility of the Politburo/Xi.
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