Comments by "" (@thomasherrin6798) on "Lei's Real Talk" channel.

It seems like the C.C.P. is in a worse debt spiral than I initially thought (The U.S. and Japanese comparison to China was particularly telling), I assumed that this would get out of hand in 10 years, but it may be more nearer 5 years, it may be a reason why the C.C.P. want control of everything at present, including private enterprise as they know that a challenging time lies ahead, and they are laying the groundwork for a master plan, only trouble is it's based on non productive labour for questionable infrastructure projects and syphoning off private companies, which will reduce investment, a broken property market and citizens savings in banks look more likely of being used, in part, for the extension of C.C.P. funds. They appear not to want to release monies to the populas and retain too much for themselves, which is the only way to move forward productively to the next stage of development! (They are "Doing a Putin", doubling down on previous bad mistakes!)!?!
14
Out of the frying pan into the 🔥!
2
Lei does a really great job in English, I don't think the majority will not understand what she is trying to communicate, it's got lots of diagrams and all!?!
2
Hahahaha, most E.U. countries have safety nets, just don't take on too much debt!?!
1
Well I don't think I'll read that one, and what's it specifically got to do with China's real estate bubble I wouldn't know, as it seems like a CCP 3 red lines enforcement with immediate effect that caused all the chaos, yes the market needed regulating but maybe years before and latterly not all at once, but Xi's the leader and he knows best, so it will come to pass, whatever the consequences!?!
1
Peter Zeihan's collapse is a 10 year slow puncture to the new normal, China's economy will drop to a more sustainable level, wherever that level is, but not the current debt fueled one. War will make it collapse!?!
1
The C.C.P. is correct until the wheels fall off and then the new way or path is found, likely with a new leader, the western capitalists are getting cagey about zero COVID and if a big drain goes on its capital to China the new way will be chosen with more urgency, However Xi has cemented his yes men at the top so any change will have to be seismic, greater than any past leader struggles, so a lot of further pain will have to build up for that to happen. Zero COVID cannot end in one year or ten years without a viable vaccine programme as the implications still remain for an overwhelmed health emergency and corresponding large deaths of the elderly who have generally not been adequately vaccinated, that is the missing part to this equation and again due to C.C.P. dogma is not being taken!?!
1
The money to complete the properties is already gone, never to come back, squandered on football stadiums and other vanity projects which are not assets in themselves, just money pits. The C.C.P. is backing nationwide schemes which attempt to get developers to restart building projects with a fraction of the money needed put up as collateral, let's say 10% of the total bill (My guess is as good as any's), the local government is responsible for administering the scheme and the developers have "employed" people to show that they are complying with the scheme to get their hands on much needed cash, however the general consensus is that this will do very little to ease the crisis (The Monies laid out might only account for 2% of the work completed at this time and 8% will go to waste) as soon as this money runs out, work will stop, and a further 90 odd % will "still" be required to complete the properties!?!
1
Good old Germany, couldn't rule the world with their autocrat so trying to hang onto the coattails of others, Russia first, now China, Iran or North Korea next!?!
1
C.C.P. only wants its own principles!?!
1
Easy - Don't declare independence, even though you are, try not to be snared in China's economy and develop ties with other Asian and Western companies, not Autocrats!?!
1
The Western businesses will be looking for the monied elite and will remain in the prosperous areas of China, this is assuming that the C.C.P. does not impose more restrictive regulations on these companies, if the C.C.P. do they will then clear off, but the C.C.P. can expect more retaliatory restrictions from the West coming back. It is assumed that the government is bank rolling these companies and it might be adding to the debt burden as there is no incentive for them to be profitable (Or indeed provide a "friendly" and efficient service, just a lump it and see attitude). Endemic corruption will be another problem that will add to the debt burden. Apart from C.C.P. having control of it, there are not many upsides, this looks like for all aspects of life in China going forward, but the Chinese are not going to do anything about it, for now!?!
1
Wall Street expectations are maybe a bit more narrow than can be imagined for China. Wall Street focuses on the parts of China that are currently and in the future operating successfully, like the export market (It expects it to be reduced over time but at present should show a return). It is less likely to invest in property, which was previously supported by Chinese Citizens, where there are unlikely to be returns due to the systemic problems now and in the near future. It is the real estate problem which has caused the local government finances to deteriorate as the property sector needs to be reduced by 50%, and the C.C.P. can't see a way to make up for that reduction in its finances (Which disproportionately affects local government financing) at present (About 2 to 3 trillion dollars worth each year). The C.C.P. could instead of putting money into non productive infrastructure could support the local governments but this will significantly reduce GDP which is an ideology driven target, it wouldn't sort out the problem but it would limit the pain. The bus drivers pay, COVID and run on some banks are temporary problems and in itself are of no note because it can be leveled at local government mismanagement. There is no easy way out for the C.C.P. as it requires the C.C.P. to reform itself top down and that is hardly likely to happen, but there is at present, no alternative apart from a different internal fraction taking control of the C.C.P.!?!
1
It seems incomprehensible that the money men from the West are prepared to believe financial figures from China on more or less face value, one wonders if money is involved, and it is quite obvious there are two sets of books, one it shows to the world, and one it keeps to the C.C.P. (Unless they are totally incompetent and really don't know the true picture of course!) I.E. it is not transparent. Just looking at G.D.P. it's going to drop 10 to 15% (30% of G.D.P. based on Property and Developers have a 50% downturn) on Property and 5% on recession and 5% on energy and food imports increases, this may be made up by infrastructure projects but this will come again from non-productive debt (I.E. China's G.D.P. will decrease by 20 to 25%, or its debt will increase proportionally). China's declared debt to G.D.P. is over 70%, but this does not include it's Province's debt which is 100% of Income at 2020 and rising, there is no clear indication of how much money that is per province or in total, but one assumes that it's quite large, it is estimated by some analysts that China's debt bomb is at 275% to 300% of G.D.P. which is already above Japan's, their troops will be needed not in Tawain but in China when it all goes pear shaped, which is unlike their demographic chart unless you turn the pear upside down!?!
1
Blimey, if the West did that we would be in an economic boom!?!
1
That Zero COVID is a stupid policy maybe?
1
The bit that's missing is the environment, otherwise growth and innovation are stymied!?!
1
CCP will take the money from big business and distribute it along its "favoured" lines, that will be its common prosperity M.O., it's a Kleptocratic state, big business wont get a look in!?!
1
China has 50-60 million empty Apartments, 90 odd million unfinished Apartments (The majority of which will not be completed), and the Chinese people currently buy 9 odd million apartments per year. That means it already has 6 odd years of apartment stock unsold and 10 years of apartment stock in the pipeline uncompleted and therefore a seismic adjustment has to be made, which at present is being kicked down the road. The GDP of China will be reduced by 10 to 15% when this adjustment is made.
1
Germany has a vested interest, most of its policies have turned to "mud" (Substitute a word of your choice ;-)) by relying on Russia, China is a gamble to keep a large profitable part of its motor industry going so it can sort its energy problem out in the meantime, long term it will diverge, China will see to that!?!
1