Is China's economy a 'ticking time bomb'?

[Social Media]

 

The past six months has brought a stream of bad news for China's economy: slow growth, record youth unemployment, low foreign investment, weak exports and currency, and a property sector in crisis.

US President Joe Biden described the world's second-largest economy as "a ticking time bomb", predicting growing discontent in the country.

China's leader Xi Jinping hit back, defending the "strong resilience, tremendous potential and great vitality" of the economy.

So who is right - Mr Biden or Mr Xi? As is often the case, the answer probably lies somewhere in between.

While the economy is unlikely to implode any time soon, China faces huge, deep-rooted challenges.

 

A property crisis and poorer households

Central to China's economic problems is its property market. Until recently, real estate accounted for a third of its entire wealth.

 

"This made no sense. No sense at all," says Antonio Fatas, professor of economics at the business school INSEAD in Singapore.

For two decades, the sector boomed as developers rode a wave of privatisation. But crisis struck in 2020. A global pandemic and a shrinking population at home are not good ingredients for a programme of relentless housebuilding.

The government, fearing a US-style 2008 meltdown, then put limits on how much developers could borrow. Soon they owed billions they could not pay back.

Now demand for houses has slumped and property prices have plunged. This has made Chinese homeowners - emerging from three years of tough coronavirus restrictions - poorer.

"In China, property is effectively your savings," says Alicia Garcia-Herrero, chief Asia economist at wealth management firm Natixis. "Until recently, it seemed better than putting your money into the crazy stock market or a bank account with low interest rates"

It means that, unlike in Western countries, there has been no post-pandemic spending boom or major economic bounce back.

 

FULL STORY

[Sing_Sling]

The news just keeps getting worse for China, which is not something we should be too happy about.  If China implodes we'll have hundreds of millions of people seeking other places to live.

One of very many interesting reports about the causes of China's slowdown.  

The previous generation was content as long as they had food on the table, now the needs/wants are far more widespread partly brought about by what Chinese can see on the internet and gradiates not getting jobs. 
 

 

[tonbridgebrit]

2 hours ago, Sing_Sling said:

 If China implodes we'll have hundreds of millions of people seeking other places to live.
 

 

 

If China implodes, we will have hundreds of millions of people trying to get out of China. And yes, this will be disastrous for Britain.

We're still seeing a load of new foreigners entering into Britain, and these new people need to live in whatever housing. This is creating more competition on the rental and buying market for houses.

The disasters in Syria, Afghanistan, Ukraine, are all adding to the numbers entering Britain. Add on new cheap immigrant labour. And them Chinese turning up from Hong Kong are also buying or paying rent for houses.

Britain has to build new houses for the new people to live in. But this isn't going to happen. So, Britain has to stop new foreigners entering. If hundreds of millions of Chinese leave China, if only just two million turn up in Britain, well, it will be disastrous for Britain.
 

[Sing_Sling]

2 hours ago, tonbridgebrit said:

So, Britain has to stop new foreigners entering

 

2 hours ago, tonbridgebrit said:

Britain

 

2 hours ago, tonbridgebrit said:

Britain

 

2 hours ago, tonbridgebrit said:

Britain

 

2 hours ago, tonbridgebrit said:

Britain

 

2 hours ago, tonbridgebrit said:

Britain

 

2 hours ago, tonbridgebrit said:

Britain

 

2 hours ago, tonbridgebrit said:

Britain

Britain?  I'm guessing you're British. ????

Fear not, the UK will continue do as little as it has been in terms of refugees.  Perhaps our focus should be more on Chinese flooding other countries by land as air travel and entry can be restricted - the UK will be fine. 
More to the point, however, is the economic disaster for every country that imports from and exports to China.  

[tonbridgebrit]

1 hour ago, Sing_Sling said:

 

 

Britain?  I'm guessing you're British. ????

Fear not, the UK will continue do as little as it has been in terms of refugees.  Perhaps our focus should be more on Chinese flooding other countries by land as air travel and entry can be restricted - the UK will be fine. 
More to the point, however, is the economic disaster for every country that imports from and exports to China.  

I was actually trying to be funny, with an over-the-top response to hundreds of millions of Chinese trying to leave China.   ????
But the issue of too many people chasing not enough housing in Britain is an issue, in my opinion.

I'ill carry on with the humour by saying this. If Chinese flood other places, like America, Canada, Europe, well, we don't really care. As long as they don't flood Britain. It's a problem for Europe, if they flood Europe.

But you're right, the world economy needs China to export it's goods. And lots of countries, including Britain, need China to import goods. China is, a vast market.

I've had a quick look at the video posted. Like so many of such videos, I feel that the main point of the video is to allow the audience to laugh and gloat over the soon-to-be collapse of China's economy. And the video is from India, some Indians are hoping that China's collapse will be good for India. They're hoping that India will partially replace China as an industrial power-house, exporting goods to the rest of the world.

[Sing_Sling]

8 hours ago, tonbridgebrit said:

I was actually trying to be funny, with an over-the-top response to hundreds of millions of Chinese trying to leave China.   ????

Well played - but the idea of leaving isn't that alien to them when times are tough, one needs only to look at the Chinese diaspora, including the numbers leaving now.  Modes of, and accessibility to, transport makes travel easier.
If you look at the Thai population you will see quite a large number of Chinese that migrated due to difficulties in the past.

When the place implodes we will sadly see issues such as famine due to the rift between urban and rural wealth and supply structures and riots - one thing that keeps Chinese people 'happy' is food in the belly more than anything else - one needs only look at pork shortages and the government trying their best to import pork at all costs recently. 

 

8 hours ago, tonbridgebrit said:

I feel that the main point of the video is to allow the audience to laugh and gloat over the soon-to-be collapse of China's economy.

There is certainly a feeling of Schadenfreude by Indians towards China - and for good reason, and the possibility of India replacing China as a manufacturing hub is one.

As or laughing and gloating, you can't blame them - their views don't take into account the problems that this will cause even them, though they are less vulnerable economically to China's issues than most.

Nice response, thank you 

[thaibeachlovers]

12 hours ago, tonbridgebrit said:

But you're right, the world economy needs China to export it's goods. And lots of countries, including Britain, need China to import goods. China is, a vast market.

Let me correct that. The rich that get richer by not using local workers and use exploited labour in China need China to export it's goods so they can continue to get richer.

 

On the one hand I want to see Chinese people turn on the government, but on the other hand NZ depends so much on China to import produce that a destroyed Chinese economy would be disastrous for NZ.

[Chomper Higgot]

Private capital is already pouring out of China, much of it headed into Thailand and certainly to the laundromat that is London.

 

 

[2baht]

I could'nt care if China crashed and burned but who will they drag down with them???????