Comments by "D W" (@DW-op7ly) on "PolyMatter" channel.

The real problem is China still has a few hundred million rural folks expected to move to the cities. But the developers are building higher end homes and not affordable housing these rural migrants will need Thus the crackdown in 2010/2011 on the Shadow Banks and Underground economy we heard about back then. And the the developers seeking bankruptcy protection these days as they money flow has been cut off to them That’s because in 2008 around 70% of the people in their real estate markets were buying their first homes By 2018 around 70% of the people in their real estate markets were buying their 2nd or 3rd homes When the people at the bottom of your society miss out? Then they are more likely to act out in protest Thus the common prosperity push and why they are cracking down on the overt displays of wealth and real estate speculation Obviously that is going to slow the economy In the end one has to ask how many homes does the average Chinese family really need?
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Plus the Chinese have been smart. The debt they have racked up is mostly “internal” debt Unlike us here in the west who have been racking up “external” Sovereign debt There is a big difference between the two. I can show what they did with the internal debt problem they had during the 1997 Asian financial crisis. Sweeping that internal debt under the table As there clearly is a big difference between the 2 types of debt If it turns out they tapped on the breaks too much they could throw money at the issue even borrowing externally But my guess is that big ball of money they threw at the economy during the American subprime crisis Basically took until now for them to get under control almost 15 years later
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@daneilating1316 There is many things we get wrong about China these days. It’s their service based economy that is their biggest driver of their economy not manufacturing and exports And this … The real Chinese trade is with their belt and road country partners Chinese trade with the USA is with mostly US multinationals whose wholly owned companies suppliers and factories within China Are the ones making the lions share of the money exporting those goods to America 👇 Special Report: How smuggled workers power 'Made in China' The smuggling of illegal workers from Vietnam across the 1,400-km (840-mile) border into China is growing. Labor brokers estimate that tens of thousands work at factories in the Pearl River Delta, which abuts Hong Kong. Workers from other Southeast Asian nations are joining them. Visits by Reuters to a half-dozen factory towns in southern China revealed the employment of illegal workers from Vietnam is widespread, and authorities often turn a blind eye to their presence. Workers from Myanmar and Laos were also discovered to be working in these areas. Reuters found that employers supply these illegal workers with fake identity cards and sometimes confine them to factory compounds to keep them out of sight of the authorities. Reuters
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@daneilating1316 One thing I stumbled upon in the 1990s as I was a junior investment analyst tasked to look at investment opportunities in China Was their companies were already going outside of the country primarily to SE Asia/Central Asia. Where the Chinese people and companies have an outsized control of these Countries economies. And these countries economies are dependent on the Chinese economy . Obviously with belt and road you see it in more other countries 👇 Trump’s ‘trade war’ with China won’t be so easy to win Having learned these value chain lessons, Beijing has worked hard to bring more of the high-value-adding parts of value chains into China, and to build hi-tech industries in which it can establish a globally competitive position. China has successfully done this in areas like high-speed trains (CRRC), digital telecoms networks (Huawei), drones (DJI) and hi-tech batteries (BYD). Trump’s team is not wrong to be worried about China’s competitive emergence here, and to target these new-tech sectors in the latest trade war sortie. But here’s the problem: China exports almost none of these new-tech products to the US, making US tariff threats meaningless. Rather, they go to developing economy markets – many embraced by the Belt and Road initiative – where China has succeeded in building a hi-tech, high-value brand reputation. As Trump’s team will quickly learn, the challenge of finding China’s pain points is bigger than expected: for a decade China’s priority has been to base growth on the domestic consumer economy and reduce reliance on the low-value-adding export processing industries (many of which are US- or Hong Kong-owned and concentrated in the Pearl River Delta) SCMP
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@danielating1316 With that said people talking about China in regards to within its national border boundaries severely underestimate what we in the west are up against That is worst than when I warned about the rise of CCP China before their GDP was even a blip on the radar And people just laughed at those warnings Are you from Africa? They also have outsized influence in Africa, a continent with not only population boom butt an economic boom 👇 https://m.youtube.com/watch?v=Jw2BOG57_2M
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Does it matter who is buying the homes? The issue was they were using it as an investment. Because they really don’t have Anthony else. Their Stock markets are like a casino And the most important thing of all you don’t have a house highly likely you don’t get married in China
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@ThePowerLover Yes USA has more internal debt than it does external debt For example 26 trillion in SS liabilities, 49 trillion in Medicare liabilities, 211 trillion in unfunded liabilities. Don’t forget about the 200 trillion in derivatives bets the TOOBIGTOFAIL banks have ion their books. Last time I checked could only cover 5% of those bets if you sold off all their assets for top dollar But then no one cares because that US internal debt has been and can be swept under the table And Yes these days with collective action agreements in sovereign debt defaults. A country like the USA is protected from holdout creditors forcing a Country who. has defaulted on its Sovereign debt , where in the past is was to be stuck in court for years and years unable to issue new external sovereign debt less it be seized Also the 33 trillion that the USA owes in external Sovereign debt right now… Much of it is owed directly indirectly to the American people But then that is assuming that the majority of the class action happy American “people” are going to allow their Government to screeew then over for 10s of trillions of dollars . If they default in that debt Also thanks for pointing that out. If you notice when we get comparisons between the USA and China debt figures there is usually great pains made to separate that US “internal” debt from that US “external” debt figures But when we get Chinese debt figures we get both the Chinese “internal” debt and the Chinese “external” debt, all lumped in together with each other Separate the two types of debt and yes they will show tons of “internal” debt, But very little “external” Sovereign debt
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@MegaBanne COLUMN-Do China's ghost cities offer a solution to Europe's migrant crisis? * While many of China’s new cities and urban districts are deficient in people they are not deficient in owners. Nearly every apartment that goes on the market in China is quickly purchased, often at exorbitant prices that commonly range into the hundreds of thousands of dollars. Far from being unwanted infrastructure that could seamlessly be doled out to refugees, those arrays of vacant high-rises are actually the proud possessions of people who paid a lot of money for them. So why would anyone spend incredible amounts of cash on houses they do not intent to use? * All over the world, the value of property extends beyond the utilitarian function of being a place to live. Real estate is also a vital economic entity that presents an avenue for investment as well as a way of storing wealth - a use of property that is taken to the extreme in China. A huge portion of the homes that are purchased in China function very much like stocks or a trade-able commodity. As an incredible number of new apartments are sold as unfinished concrete cavities without any interior fit out or even windows, they are in no way immediately livable. Strange as it may seem, they are very actively bought and sold in this bare-bones form. In fact, investors often prefer them that way. In many ways they are purely economic entities, quantifiable placeholders of value that are traded on the open market akin to precious metals. Just as one doesn’t need to mold a piece of gold into something usable, like a piece of jewelry, for it to have value and an economic function, an apartment in China doesn’t need to have people living in it for it to be economically viable. “Empty units leave flexibility for quick sales in a changing market or need to cash in quickly,” said Barry Wilson, the founding director of Barry Wilson Project Initiatives, a Hong Kong-based urban design firm. Another reason for the sheer number of unused apartments in China is the fact that there is often little financial incentive for owners to do anything with them after purchase. There is no yearly property tax in China, so vacant properties are not a financial drain on their owners. While the potential returns that could be had from renting them out (1 percent or so) is often not worth the hassle - especially because it costs tens of thousands of dollars to construct the interiors of new apartments in preparation for tenants. This is combined with the fact that Chinese homeowners, especially investors who have multiple properties, are remarkably un-leveraged. According to Mark Tanner, over 80 percent of homes in China are owned outright. Reuters
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@Megabanne Even the folks who have mortgages up until now? But then this is for the poorer rural folks still expected to move to the cities 👇 Under the changes, interest rates when buying a new home in Beijing could drop from 5.25% to 4.75% a year, according to Shanghai Yiju Real Estate Research Institute. The minimum down payment as a percentage of total purchase price could fall from 80% to as low as 35%. Nikkei Asia
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It’s just a “Common Prosperity” push by the Central Government China still has a few hundred million poorer Rural Chinese still expected to move to the cities And join the rest Not going to happen if developers keep building higher end homes and not enough affordable housing. And the more well off keep snapping up these homes Disenfranchise the people at the bottom of your society and they will be the ones most likely to act out in protest China has been trying to tap the breaks on the real estate bubble since 2010. I know because I dumped my Chinese real estate ETFs in 2011 I would argue even the US/China trade war was over China closing off its economy. For example Nixing that Alipay IPO which would have been the biggest in history Yes China could open up its economy make many in China and the world even richer… but that would only widen the gulf between the rich and the poor in China When in doubt go off of what the top 1% investment bankers already know 👇 Project Syndicate The value of global China July 23, 2019 | Article By Jeongmin Seong and Jonathan Woetzel China faces important questions about whether and to what extent it should continue to pursue opening up its economy to the rest of the world, write Jonathan Woetzel and Jeongmin Seong in Project Syndicate. In any case, China and the world face important questions about the trajectory of their mutual engagement. At stake, according to our simulation, may be some $22-37 trillion in economic value – or 15-26% of world GDP – by 2040 McKinsey
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I'd rather see money put into real estate/infrastructure. Rather than see it put into interest payments on your debt. Especially if you can you show very little for that debt except to prop up the economy. Like some broke individual borrowing on a credit card to pay off the other credit cards
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Thus the “Common Prosperity” push by the Central Government China still has a few hundred million poorer Rural Chinese still expected to move to the cities And join the rest like you Not going to happen if developers keep building higher end homes and not enough affordable housing Disenfranchise the people at the bottom of your society and they will be the ones most likely to act out in protest China has been trying to tap the breaks on the real estate bubble since 2010. I know because I dumped my Chinese real estate ETFs in 2011 I would argue even the US/China trade war was over China closing off its economy Yes China could open up its economy make many in China and the world even richer… but that would only widen the gulf between the rich and the poor in China When in doubt go off of what the 1% investment bankers know 👇 Project Syndicate The value of global China July 23, 2019 | Article By Jeongmin Seong and Jonathan Woetzel China faces important questions about whether and to what extent it should continue to pursue opening up its economy to the rest of the world, write Jonathan Woetzel and Jeongmin Seong in Project Syndicate. In any case, China and the world face important questions about the trajectory of their mutual engagement. At stake, according to our simulation, may be some $22-37 trillion in economic value – or 15-26% of world GDP – by 2040 McKinsey
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