Property market collapse in China and a Chinese economic recession is the key threat to Thailand

[webfact]

 

by Joseph O' Connor

 

Thai economy is currently chugging along in choppy waters as China’s problems grow and the US dices with recession. However, the key worry is, increasingly, the danger of a growing economic downside in China where a property market valued at twice the US national debt has already fallen by 40% threatening to deepen an already existing banking crisis. 

Thailand still aims for 3% to 3.5% growth this year while, unlike many western countries, planners are confident of reining in inflation towards the end of 2022 while maintaining steady export growth and driving a recovering foreign tourism industry. The key threat facing the kingdom and one that is still emerging is a deteriorating Chinese economy and the possibility of a shock wave created by a collapse of the Chinese property sector, in addition to rising insecurity caused by heightened tensions between the United States and its western partners and Thailand’s strategically important trading partner to the north.

 

The jury is still out on whether the United States will enter a recession this year despite a technical recession in the opening quarters of 2022 and signs that rising interest rates are starting to dampen demand.

 

This is a key factor for Thai economic planners as the United States is the country’s biggest export market as well as being a key investor and potential economic ally going forward as prospects begin to dim for China.

 

Full story: https://www.thaiexaminer.com/thai-news-foreigners/2022/09/08/property-collapse-in-china-a-key-threat-thai-economy/

 

-- © Copyright Thai Examiner 2022-09-09

 

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[2baht]

3 hours ago, webfact said:

China’s problems grow

Will we see a downsizing of their military and aggressive expansionism??? ????

[ozz1]

Coming to your neighbourhood soon

[bkk6060]

All this plus, they cannot travel unless it is eseential.  I see the Chinese governemt restricitng their travel indefinitly for several reasons.  A big one being, they want to keep the money in their country and not have their people moving/buying property in other countries.

[ezzra]

Maybe communism has run it's course and time to re-think different way of governing, show me a one communist country in the world that is doing well and i'll show you people live in fear or running foul with the secrete police, even Russia is not doing well under the leadership of that tyrant Putin, stories of  stolen armed forces items, from a battle gear to heavy vehicles are being sold in an open markets and online...

[Artisi]

29 minutes ago, 2baht said:

Will we see a downsizing of their military and aggressive expansionism??? ????

Unlikely ????

[Orinoco]

A good news thread for a change. 

[2baht]

6 minutes ago, ezzra said:

Maybe communism has run it's course and time to re-think different way of governing, show me a one communist country in the world that is doing well and i'll show you people live in fear or running foul with the secrete police, even Russia is not doing well under the leadership of that tyrant Putin, stories of  stolen armed forces items, from a battle gear to heavy vehicles are being sold in an open markets and online...

Seems to work ok in Vietnam. 

[jcmj]

The Chinese that have money always find a way to travel and get there money out. The general population are the ones that suffer. Happens everywhere. 

[ThailandRyan]

14 minutes ago, ezzra said:

Maybe communism has run it's course and time to re-think different way of governing, show me a one communist country in the world that is doing well and i'll show you people live in fear or running foul with the secrete police, even Russia is not doing well under the leadership of that tyrant Putin, stories of  stolen armed forces items, from a battle gear to heavy vehicles are being sold in an open markets and online...

Communism and Capitalism, can they ever truly co-exist.  5 communist countries remain, but Vietnam is turning more and more into a Capitalist Country despite a one party rule.

[ThailandRyan]

2 minutes ago, jcmj said:

The Chinese that have money always find a way to travel and get there money out. The general population are the ones that suffer. Happens everywhere. 

The Hi-So 1%.  Was there not a Flight from Guangzhou to BKK two nights ago full of tourists that was diverted to Don Mueng do to water and winds at Suvarnabhumi and then a few hours later lifted off and landed at Suvarnabhumi to discharge the Chinese Tourists?  Seems some can get out, maybe Mongolians.....

[mikebell]

Luckily, we are told the Thai property market is booming!

[Gottfrid]

5 hours ago, webfact said:

Thai economy is currently chugging along in choppy waters as China’s problems grow and the US dices with recession. However, the key worry is, increasingly, the danger of a growing economic downside in China where a property market valued at twice the US national debt has already fallen by 40% threatening to deepen an already existing banking crisis. 

That´s the result of going to bed with the devil.

[Iamfalang]

900 million suffer and stay home .   200 million will travel.    

 

[lujanit]

I know someone who put one million Baht into a Long Term Fund with a major bank here.  In a few months it was worth 60,000 baht less.  Of course the fund invested heavily in the Chinese property market.  The money was promptly withdrawn.  This was before the ills of Evergrande and company was fully known.  Now it would be nearly worthless.

[edwinchester]

2 hours ago, jcmj said:

The Chinese that have money always find a way to travel and get there money out. The general population are the ones that suffer. Happens everywhere. 

Before I met wifey I had a Chinese girlfriend who was studying in the UK for a Master's Degree. Her dad was high up in a Chinese construction company. Every few months I would drive her up to a Heathrow hotel where she'd meet an air hostess from one of the Chinese airlines who'd give her a bag stuffed full of cash. Happy days 555.

[hotchilli]

The vast majority of Chinese investors have money and life savings tied up in property as they didn't trust the banks.

They've caught a severe cold as the developers were playing  with fire and promises of properties have not been built but monies handed over and lost..

China will keep Chinese at home and not allow cash to leave the country.

 

[spidermike007]

The Thai economy is already in big trouble. This may only add to the woes. This could have been avoided. Covid was a factor, but a small one. Mismanagement, malfeasance, gross incompetence, fear, hesitancy and extreme cowardice were  far bigger factors in the decimation. All this, despite the numbers being pumped out and likely fabricated.

 

You want evidence of the economic slowdown? Look at the 1000's of billboards nationwide that have remained blank. That represents a fortune companies are unwilling to spend here. 

[kingstonkid]

Let's face it the world is going to hell in a handbasket.

 

Unfortunately for many, the governmental system for resolving these things has been war.  

 

Let us hope that it does not happen this time and that people learn from history instead of repeating it.

 

The funny thing may be that being here in Thailand may be the safest thing for many people.

[sammieuk1]

Xi Wizz that's great news ????  

[hansnl]

Connecting ad relying too much on China is playing with the devil.

[swerve]

China has been building at a quick pace for a long time.  The large cities have so many high rises going up.  Even without covid, severe market problems were eventually going to happen.  Can't build like that forever.

[Cake Monster]

1 hour ago, mikebell said:

Luckily, we are told the Thai property market is booming!

The sharp downturn in the Chinese Property Market, and a slowing of its Industrial Output beggars the question. 

Just how much exposure to the Chinese Market do the Thai Banks, Financial Institutions, and very wealthy individuals have?

I know that the Authorities here have come out previously and stated that Thailand has very little exposure to these risks, but TIT, and the greed factor is enormous, and the very rich seem to be of Chinese decent, so there will be exposure, but how much exactly.

Money will have been seeded in China for sure, especially through the Covid and Tourist Downturn, but just how much has been able to be brought back Home ?, and how much is still locked into what were seen to be very lucrative property Markets.

IMO, the exposure could be quite significant, as it would have been an opportunity to make Money that would have been irresistible, and now maybe there will be some serious ramifications in the Thai Market Place. 

 

 

 

 

[hansnl]

4 hours ago, Artisi said:

Unlikely ????

The opposite, probably.

The Chinese "leaders" need an outside enemy to stay relevant.

[ThailandRyan]

34 minutes ago, swerve said:

China has been building at a quick pace for a long time.  The large cities have so many high rises going up.  Even without covid, severe market problems were eventually going to happen.  Can't build like that forever.

Tell that also to the folks building the high rises in Bangkok, they are going up everywhere, and even new hotels while others sit vacant and so many condo projects are still half empty.......

[ThailandRyan]

35 minutes ago, Cake Monster said:

The sharp downturn in the Chinese Property Market, and a slowing of its Industrial Output beggars the question. 

Just how much exposure to the Chinese Market do the Thai Banks, Financial Institutions, and very wealthy individuals have?

I know that the Authorities here have come out previously and stated that Thailand has very little exposure to these risks, but TIT, and the greed factor is enormous, and the very rich seem to be of Chinese decent, so there will be exposure, but how much exactly.

Money will have been seeded in China for sure, especially through the Covid and Tourist Downturn, but just how much has been able to be brought back Home ?, and how much is still locked into what were seen to be very lucrative property Markets.

IMO, the exposure could be quite significant, as it would have been an opportunity to make Money that would have been irresistible, and now maybe there will be some serious ramifications in the Thai Market Place. 

 

 

 

 

So many Chinese banks here in the Sathorn Area. How many Thai's have accounts in them or how many have borrowed from them to finance cars, homes etc.....the hook is in deep in this country.

[HaoleBoy]

This article just talks about the Chinese Property Market and its demise.  Another factor in this are the local governments that were building schools and infrastructure while properties were booming.  Now the CCP must bail out the local governments.

 

The Silk Road initiative is also a weight around the CCPs neck.  A lot of money loaned out with no chance of repayment since these foreign governments are going bust.

 

Recently read that Chinese debt is up to 289% of GDP this year.  Yes, the US debt is around 98% of GDP, but 289% is huge.

 

Thailand hitching its prospects on Chinese for anything will lead to a long road to hell.

[Hawaiian]

2 hours ago, HaoleBoy said:

This article just talks about the Chinese Property Market and its demise.  Another factor in this are the local governments that were building schools and infrastructure while properties were booming.  Now the CCP must bail out the local governments.

 

The Silk Road initiative is also a weight around the CCPs neck.  A lot of money loaned out with no chance of repayment since these foreign governments are going bust.

 

Recently read that Chinese debt is up to 289% of GDP this year.  Yes, the US debt is around 98% of GDP, but 289% is huge.

 

Thailand hitching its prospects on Chinese for anything will lead to a long road to hell.

I mentioned the enormous financial strain the Silk Road initiative is having with little return to show for in a blog on Thailand's attempt to acquire  F-35 's from the U.S.  My comment was dismissed by several posters.  Unlike you, they do not understand how serious the problem is for China.

To avoid delisting of some major Chinese companies from U.S. stock exchanges China has recently agreed to comply with SEC auditing rules.  This comes after years of refusing to do so.   Another sign of China's financial problems.

And isn't China experimenting with a digital currency to stop the flight of capital?  

Is this the beginning of the implosion Gordon Chang has been talking about?

[Baron Samedi]

China will be just fine.

Their central bank didn't even start with QE.

China won't have a banking crisis.

Growth forecast for the next 10 years stands at 5%.

Chinese middle class still growing.

Thailand should worry about its own domestic problems.

 

 

[Lacessit]

8 hours ago, 2baht said:

Will we see a downsizing of their military and aggressive expansionism??? ????

No. Wars are usually started by leaders who wish to distract their population from internal issues.