Is China crashing?

[midas]

It will certainly be interesting to find out what happens to all the gdp inflating bridges, hospitals buildings that are empty. I guess being empty means less maintainance costs, but will still requrie some sort of upkeep

nothing much will happen. sooner or later all "ghost" infrastructure will be used respectively occupied. as simple as that.

(/quote)

And who shall acquire them and at what prices? Or will they be taken over through communistic means for the Good of the State? Who will clear the debts (+ accrude interests) that were borrowed on peak bubble prices? And who have to bear the losses if debts cannot be cleared?

straight answer to your questions... neither you nor me. it is also neither our or the many gloom&doom gurus' business to advise the Chinese leadership how to proceed. one way or the other a solution will be found even if that solution starts with a big bang affecting other countries too.

only a decade ago a number of countries were in much worse shape than China and only ignorants think the Chinese are suckers. that applies especially to ignorants who live in Asia and pretend they are blind.

sheesh……….. how many “ big bangs “can other countries withstand on top what they already face i.e DEBT DEBT and more DEBT?

[trogers]

It will certainly be interesting to find out what happens to all the gdp inflating bridges, hospitals buildings that are empty. I guess being empty means less maintainance costs, but will still requrie some sort of upkeep

nothing much will happen. sooner or later all "ghost" infrastructure will be used respectively occupied. as simple as that.

(/quote)

And who shall acquire them and at what prices? Or will they be taken over through communistic means for the Good of the State? Who will clear the debts (+ accrude interests) that were borrowed on peak bubble prices? And who have to bear the losses if debts cannot be cleared?

straight answer to your questions... neither you nor me. it is also neither our or the many gloom&doom gurus' business to advise the Chinese leadership how to proceed. one way or the other a solution will be found even if that solution starts with a big bang affecting other countries too.

only a decade ago a number of countries were in much worse shape than China and only ignorants think the Chinese are suckers. that applies especially to ignorants who live in Asia and pretend they are blind.

Perhaps the first people who will help bear the losses are those on the 'Slaughter List'?

The private businessmen, once their wealth reaches a certain level, are like the pigs farmers raise only for the sake of slaughtering them for meat.

http://www.theepochtimes.com/n3/201393-recent-deaths-show-reality-of-china-dream/

[Jingo]

Gotta love how it's usually deluded "American Exceptionalism" types who keep pushing this "ghost cities" narrative.

The fact is, America actually has a bigger "ghost city" problem (more like abandoned cities, *cough* detroit *cough*).

If you can do simple math, all it takes is looking up the numbers.

China has roughly 64 million empty "housing units" (mostly apartments).

America has 18 million empty HOUSES.

The average American household usually need about 2.6 people (people don't buy houses till they start kids oftentimes).

The average Chinese apartment holds 1.4 people.

So basically the US needs 47 million people, while China needs 90 million. The USA has 20% of the population of China but nearly half as much empty housing proportionally.

In addition, the USA has a trend of people ditching housing for apartments because it has a shrinking economy (if you adjust for inflation and population growth the GDP is shrinking per capita quite rapidly even using official numbers). Whereas China is having more and more rural people move into housing and has a growing economy.

There is also the fact that Chinese real estate owners do not panic at the first sign of recession. Having worked in the biz, I can tell you they are stubborn as heck and will often hold properties for years even decades rather than sell for anything less than what they had initially dreamed (even if it means holding it so long they lose money overall).

Whereas Americans panic fast (see California real estate market in '08) and prices can plummet in the blink of an eye.

If there is anyone to worry about it would be America, which has far more debt, and negative growth per capita which bodes poorly for housing. American apartments may see a boost though as the US is gaining more population specifically unskilled poor (while the upper/middle classes are shrinking).

[Naam]

Perhaps the first people who will help bear the losses are those on the 'Slaughter List'?

The private businessmen, once their wealth reaches a certain level, are like the pigs farmers raise only for the sake of slaughtering them for meat.

http://www.theepochtimes.com/n3/201393-recent-deaths-show-reality-of-china-dream/

a known and "sad" fact is that it is usually the creditor and not the debtor who bears losses. but i expect, as far as Chinese losses are concerned, a similiar situation as we experienced (and still experience) in the U.S. as well as in Europe, namely billions or even trillions pumped into banks and countries by QEs and a bunch of other means and thereby putting the lion share of the losses on the present and future taxpayer generations generating results not yet known.

[midas]

The progress of China's development comes at a huge cost to the lives of citizens in rural areas. Is it right to measure China's progress solely in monetary terms?

Cancer villages in China

https://www.youtube.com/watch?v=-rj9Wx_jg40

and the cities also have the problem -smog levels in Beijing are frequently literally "off the charts", it was only a matter of time before some aspiring Chinese entrepreneur decided to provide a much demanded product: clean air.

https://twitter.com/XHNews/status/308127179173163008/photo/1

Edited July 27, 2013 by midas

[lovetotravel]

Gotta love how it's usually deluded "American Exceptionalism" types who keep pushing this "ghost cities" narrative.

The fact is, America actually has a bigger "ghost city" problem (more like abandoned cities, *cough* detroit *cough*).

If you can do simple math, all it takes is looking up the numbers.

China has roughly 64 million empty "housing units" (mostly apartments).

America has 18 million empty HOUSES.

The average American household usually need about 2.6 people (people don't buy houses till they start kids oftentimes).

The average Chinese apartment holds 1.4 people.

So basically the US needs 47 million people, while China needs 90 million. The USA has 20% of the population of China but nearly half as much empty housing proportionally.

In addition, the USA has a trend of people ditching housing for apartments because it has a shrinking economy (if you adjust for inflation and population growth the GDP is shrinking per capita quite rapidly even using official numbers). Whereas China is having more and more rural people move into housing and has a growing economy.

There is also the fact that Chinese real estate owners do not panic at the first sign of recession. Having worked in the biz, I can tell you they are stubborn as heck and will often hold properties for years even decades rather than sell for anything less than what they had initially dreamed (even if it means holding it so long they lose money overall).

Whereas Americans panic fast (see California real estate market in '08) and prices can plummet in the blink of an eye.

If there is anyone to worry about it would be America, which has far more debt, and negative growth per capita which bodes poorly for housing. American apartments may see a boost though as the US is gaining more population specifically unskilled poor (while the upper/middle classes are shrinking).

Really? The first 2 reports I read on these were from BBC and an Australian channel, even Al Jazeera. Can't really compare China's ghost cities with the ones in the US. Most in Detroit are old, and would be good to tear down anyway. China's are brand new and never lived in. Like Kangbashi. Intended to house 1MM people, but only 20-30k live there. I'd call that a ghost town, and probably the biggest in the world. Al Jazeera broke the news on that one.

Comparing Chinese housing to American ones is impossible. Vacant houses in the US are being absorbed at a very fast pace. I've got friends in this business and it's moving quickly. Biggest impediment is funding. A mess in the US right now. But things are changing rapidly. Look at the increased in Phoenix. In Vegas, they're having bidding wars on vacant houses.

Methinks you've been reading too many anti-american websites. Maybe RT? Zero Hedge?

[Naam]

It will certainly be interesting to find out what happens to all the gdp inflating bridges, hospitals buildings that are empty. I guess being empty means less maintainance costs, but will still requrie some sort of upkeep

nothing much will happen. sooner or later all "ghost" infrastructure will be used respectively occupied. as simple as that.

(/quote)

And who shall acquire them and at what prices? Or will they be taken over through communistic means for the Good of the State? Who will clear the debts (+ accrude interests) that were borrowed on peak bubble prices? And who have to bear the losses if debts cannot be cleared?

straight answer to your questions... neither you nor me. it is also neither our or the many gloom&doom gurus' business to advise the Chinese leadership how to proceed. one way or the other a solution will be found even if that solution starts with a big bang affecting other countries too.

only a decade ago a number of countries were in much worse shape than China and only ignorants think the Chinese are suckers. that applies especially to ignorants who live in Asia and pretend they are blind.

sheesh……….. how many “ big bangs “can other countries withstand on top what they already face i.e DEBT DEBT and more DEBT?

i don't know and you don't know.

[NeverSure]

Gotta love how it's usually deluded "American Exceptionalism" types who keep pushing this "ghost cities" narrative.

The fact is, America actually has a bigger "ghost city" problem (more like abandoned cities, *cough* detroit *cough*).

If you can do simple math, all it takes is looking up the numbers.

China has roughly 64 million empty "housing units" (mostly apartments).

America has 18 million empty HOUSES.

The average American household usually need about 2.6 people (people don't buy houses till they start kids oftentimes).

The average Chinese apartment holds 1.4 people.

So basically the US needs 47 million people, while China needs 90 million. The USA has 20% of the population of China but nearly half as much empty housing proportionally.

In addition, the USA has a trend of people ditching housing for apartments because it has a shrinking economy (if you adjust for inflation and population growth the GDP is shrinking per capita quite rapidly even using official numbers). Whereas China is having more and more rural people move into housing and has a growing economy.

There is also the fact that Chinese real estate owners do not panic at the first sign of recession. Having worked in the biz, I can tell you they are stubborn as heck and will often hold properties for years even decades rather than sell for anything less than what they had initially dreamed (even if it means holding it so long they lose money overall).

Whereas Americans panic fast (see California real estate market in '08) and prices can plummet in the blink of an eye.

If there is anyone to worry about it would be America, which has far more debt, and negative growth per capita which bodes poorly for housing. American apartments may see a boost though as the US is gaining more population specifically unskilled poor (while the upper/middle classes are shrinking).

It would be real nice if you'd include credible links when you make claims.

Link

Beijing Alone Has 50% More Vacant Housing Than The US

Submitted by Tyler Durden on 06/05/2012 10:16 -0400

Putting some housing things into perspective. From the (less than credible) NAR:

Total housing inventory at the end of April rose 9.5 percent to

2.54 million

existing homes available for sale

, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March. Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.

Meanwhile, half a world away, from a just released report in Beijing News (google translated):

The Beijing Public Security Bureau Population Administration Department said yesterday that have checked the information of the mobile population 725.5 million, mark the rental housing 1.39 million,

checking vacant houses to 3.812 million

.

So, broadly speaking: US: 2.5 million available homes; Beijing - one city in China - has 3.8 million??

That is all.

[lovetotravel]

The progress of China's development comes at a huge cost to the lives of citizens in rural areas. Is it right to measure China's progress solely in monetary terms?

Cancer villages in China

https://www.youtube.com/watch?v=-rj9Wx_jg40

and the cities also have the problem -smog levels in Beijing are frequently literally "off the charts", it was only a matter of time before some aspiring Chinese entrepreneur decided to provide a much demanded product: clean air.

https://twitter.com/XHNews/status/308127179173163008/photo/1

The Chinese government and upper class treat their poorer fellow countrymen terribly. Stealing land, enslaving them, poisoning their food. I think the top 5 most polluted cities in the world are in China. Massive corruption and government cover ups don't help matter much either.

Just read a report where foreign baby milk is a prized possession now. They don't trust what's made locally. And for good reason.

Yes, the Chinese judge everything monetarily. It's all about the money. Unfortunately, that's spilling over to Thailand now also. Too much Chinese influence here.

[midas]

nothing much will happen. sooner or later all "ghost" infrastructure will be used respectively occupied. as simple as that.

(/quote)

And who shall acquire them and at what prices? Or will they be taken over through communistic means for the Good of the State? Who will clear the debts (+ accrude interests) that were borrowed on peak bubble prices? And who have to bear the losses if debts cannot be cleared?

straight answer to your questions... neither you nor me. it is also neither our or the many gloom&doom gurus' business to advise the Chinese leadership how to proceed. one way or the other a solution will be found even if that solution starts with a big bang affecting other countries too.

only a decade ago a number of countries were in much worse shape than China and only ignorants think the Chinese are suckers. that applies especially to ignorants who live in Asia and pretend they are blind.

sheesh……….. how many “ big bangs “can other countries withstand on top what they already face i.e DEBT DEBT and more DEBT?

i don't know and you don't know.

you don't know and I don't know………. so let’s consider Marc Faber’s viewpoint - “ financial markets have grown disproportionately to the real economy “ - you can’t argue with that?

http://www.zerohedge.com/news/2013-07-26/marc-faber-its-gonna-end-one-day-through-war-or-financial-collapse

Edited July 27, 2013 by midas

[midas]

The progress of China's development comes at a huge cost to the lives of citizens in rural areas. Is it right to measure China's progress solely in monetary terms?

Cancer villages in China

https://www.youtube.com/watch?v=-rj9Wx_jg40

and the cities also have the problem -smog levels in Beijing are frequently literally "off the charts", it was only a matter of time before some aspiring Chinese entrepreneur decided to provide a much demanded product: clean air.

https://twitter.com/XHNews/status/308127179173163008/photo/1

The Chinese government and upper class treat their poorer fellow countrymen terribly. Stealing land, enslaving them, poisoning their food. I think the top 5 most polluted cities in the world are in China. Massive corruption and government cover ups don't help matter much either.

Just read a report where foreign baby milk is a prized possession now. They don't trust what's made locally. And for good reason.

Yes, the Chinese judge everything monetarily. It's all about the money. Unfortunately, that's spilling over to Thailand now also. Too much Chinese influence here.

your post reminded me of this story earlier this week. I hope KFC Thailand is better ?!!

China Broadcaster Says KFC’s Ice Dirtier Than Toilet Water

In a program that aired Saturday night, China Central Television said reporters had recently taken ice samples from three fast-food chains and compared them with toilet water. The samples from a branch of KFC in the city’s southern Chongwenmen district were found to have levels of bacteria 12 times higher than the toilet water, and 19 times higher than China’s standards for drinking water.

http://blogs.wsj.com/chinarealtime/2013/07/23/broadcaster-says-kfcs-ice-dirtier-than-toilet-water/

Edited July 27, 2013 by midas

[lovetotravel]

The progress of China's development comes at a huge cost to the lives of citizens in rural areas. Is it right to measure China's progress solely in monetary terms?

Cancer villages in China

https://www.youtube.com/watch?v=-rj9Wx_jg40

and the cities also have the problem -smog levels in Beijing are frequently literally "off the charts", it was only a matter of time before some aspiring Chinese entrepreneur decided to provide a much demanded product: clean air.

https://twitter.com/XHNews/status/308127179173163008/photo/1

Man, that video is depressing. Seems there are lots of them like this for viewing, relating to pollution problems.

Here's one I never knew about. Executions. They estimate 5,000 per year.

https://www.youtube.com/watch?v=q9vx_MgGWDU

Great country.

[midas]

The progress of China's development comes at a huge cost to the lives of citizens in rural areas. Is it right to measure China's progress solely in monetary terms?

Cancer villages in China

https://www.youtube.com/watch?v=-rj9Wx_jg40

and the cities also have the problem -smog levels in Beijing are frequently literally "off the charts", it was only a matter of time before some aspiring Chinese entrepreneur decided to provide a much demanded product: clean air.

https://twitter.com/XHNews/status/308127179173163008/photo/1

Man, that video is depressing. Seems there are lots of them like this for viewing, relating to pollution problems.

Here's one I never knew about. Executions. They estimate 5,000 per year.

https://www.youtube.com/watch?v=q9vx_MgGWDU

Great country.

these allegations are even more horrific. If true why isn' t the UN investigating this ?

China’s orphanages used as Organ Repositories?

Orphanages are stacked with unwanted baby girls. Child rights activists from the West posing as curious tourists claimed, “thousands upon thousands,” of unwanted baby girls were warehoused in what the government officially calls “orphanages” waiting to be slaughtered for their “young organs.”

http://www.examiner.com/article/harvested-organs-and-body-parts-from-prisoners-and-orphanages-for-sale-china-allegations-charge

[lovetotravel]

your post reminded me of this story earlier this week. I hope KFC Thailand is better ?!!

China Broadcaster Says KFCs Ice Dirtier Than Toilet Water

In a program that aired Saturday night, China Central Television said reporters had recently taken ice samples from three fast-food chains and compared them with toilet water. The samples from a branch of KFC in the citys southern Chongwenmen district were found to have levels of bacteria 12 times higher than the toilet water, and 19 times higher than Chinas standards for drinking water.

http://blogs.wsj.com/chinarealtime/2013/07/23/broadcaster-says-kfcs-ice-dirtier-than-toilet-water/

I wouldn't doubt it. But they also said this:

China is not alone in serving ice cubes that make toilet water seem clean by comparison. In June, the British newspaper Daily Mail said it conducted the [/size]same experiment with samples of ice from 10 fast-food chains and found six that had higher bacterial levels than toilet water.[/size]

I'd bet that KFC restaurant was run by a local and inspected by a local corrupt official. Scary.

My good friend lived in Shanghai for 7 years. He said every 3-4 months he'd get sick from something. Got hospitalized one time for a week. Never could figure out what it was, but guessed pollution of some sort.

[h90]

Part of China's problem could be the quality of their goods. Or lack thereof. I have spoken with people from various countries that will no longer buy Chinese products. simply because of the poor quality. This is not built in obsolescence. There is no pride or quality in their work , which comes as no surprise considering the working conditions and inferior materials. All China has is a cheap labour force. With no real technology of their own.

If you would have asked my grandfather a few decades ago he would have told exactly the same about Japan.

The high quality Taiwanese products I buy are produced in China. The bigger companies in China just do anything to make business....even good quality.

But on the good quality there isn't much price advantage.

[lovetotravel]

I'd click "like" on your post, Midas. But can't! That's terrible. And people bitch about the US. God help us if China really does become the next superpower.

[Naam]

it's mainly the "dirty ice cubes" and the "organs of orphans" which will cause China to crash.

but wait... there's more... "cancer villages" will prevent China to become a super power.

[craigt3365]

it's mainly the "dirty ice cubes" and the "organs of orphans" which will cause China to crash.

but wait... there's more... "cancer villages" will prevent China to become a super power.

It's always the "little" things that get ya! 5555

[Jingo]

It would be real nice if you'd include credible links when you make claims.

Link

Beijing Alone Has 50% More Vacant Housing Than The US

Submitted by Tyler Durden on 06/05/2012 10:16 -0400

Total housing inventory at the end of April rose 9.5 percent to 2.54 million existing homes available for sale, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March. Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.

So, broadly speaking: US: 2.5 million available homes; Beijing - one city in China - has 3.8 million??

The Beijing Public Security Bureau Population Administration Department said yesterday that have checked the information of the mobile population 725.5 million, mark the rental housing 1.39 million, checking vacant houses to 3.812 million.

That is all.

There is a key word you used there: "available for sale". The US has over 16 million empty houses that are not up for sale because the banks are holding them to try and keep up home prices. The reason is if they flood the market with homes prices would collapse much faster and it would trigger the very sort of housing collapse you are worried about in China which DOESN'T hold their properties off the market to inflate prices as the US is doing).

The US government reported there are 18.4 milliom empty housing units (mostly houses), and that means the US needs 47 million residents to fill them (since average people per housing unit is 2.6 in the US), whereas China's 64 million empty units are mostly apartments and China's average occupancy per housing unit is 1.4, so they need about 90 million people.

China has 5x the population but needs less than 2x as many people (90 million vs US' 47 million). In addition, China has a growing economy, whereas the US GDP is shrinking if you factor for inflation, and per capita GDP is shrinking rapidly (since you have to factor inflation AND population growth, many people forget the latter). So more and more Americans cannot afford housing and move into apartments, the crisis will only get worse.

Want to know the REAL reason why the banks HAVE to be bailed out in the USA? Because if they release even just a few million of the 16 million houses they are withholding from the market, the US economy would instantly crash due to plummeting housing prices. In bankruptcy proceedings a bank would be forced to sell it's houses even for a loss to pay off creditors.

Edited July 29, 2013 by Jingo

[Jingo]

Really? The first 2 reports I read on these were from BBC and an Australian channel, even Al Jazeera. Can't really compare China's ghost cities with the ones in the US. Most in Detroit are old, and would be good to tear down anyway. China's are brand new and never lived in. Like Kangbashi. Intended to house 1MM people, but only 20-30k live there. I'd call that a ghost town, and probably the biggest in the world. Al Jazeera broke the news on that one.

Comparing Chinese housing to American ones is impossible. Vacant houses in the US are being absorbed at a very fast pace. I've got friends in this business and it's moving quickly. Biggest impediment is funding. A mess in the US right now. But things are changing rapidly. Look at the increased in Phoenix. In Vegas, they're having bidding wars on vacant houses.

Methinks you've been reading too many anti-american websites. Maybe RT? Zero Hedge?

No, I've worked in real estate in Chinese and American regions (I am fluent in Chinese), so this is just common sense for me, and I got the statistics from US government websites.

And you are really amazing. You think having 20 million decaying houses is better than 60 million brand spanking new apartments? You do realize "tearing down" houses ITSELF costs about $20,000 per house. You seem to think bulldozing is free....

And "houses for sale" in the US are only a FRACTION of how many are empty, so yes the market is doing just fine because the banks are withholding properties to make sure prices stay up but they can't do it forever in a shrinking economy. And Phoenix and Vegas are part of the growing areas of the USA. Texas is growing too and real estate is doing good there. The problem tends to be in blue states (Real estate markets in Detroit, Los Angeles, and Chicago should provide a good perspective). Part of the reason is their huge bloated pensions which usually invest into the real estate market and so cutting them, while looking good from an outside perspective to save the bankrupted state budgets, would cut off the last lifeline the property market in those shrinking economies (CA, NY, IL, etc.) have left.

Edited July 29, 2013 by Jingo

[rijb]

China has at least 36 local governments with as much debt, on average, as Detroit

[lovetotravel]

It would be real nice if you'd include credible links when you make claims.

Link

Beijing Alone Has 50% More Vacant Housing Than The US

Submitted by Tyler Durden on 06/05/2012 10:16 -0400

Total housing inventory at the end of April rose 9.5 percent to 2.54 million existing homes available for sale, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March. Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.

So, broadly speaking: US: 2.5 million available homes; Beijing - one city in China - has 3.8 million??

The Beijing Public Security Bureau Population Administration Department said yesterday that have checked the information of the mobile population 725.5 million, mark the rental housing 1.39 million, checking vacant houses to 3.812 million.

That is all.

There is a key word you used there: "available for sale". The US has over 16 million empty houses that are not up for sale because the banks are holding them to try and keep up home prices. The reason is if they flood the market with homes prices would collapse much faster and it would trigger the very sort of housing collapse you are worried about in China which DOESN'T hold their properties off the market to inflate prices as the US is doing).

The US government reported there are 18.4 milliom empty housing units (mostly houses), and that means the US needs 47 million residents to fill them (since average people per housing unit is 2.6 in the US), whereas China's 64 million empty units are mostly apartments and China's average occupancy per housing unit is 1.4, so they need about 90 million people.

China has 5x the population but needs less than 2x as many people (90 million vs US' 47 million). In addition, China has a growing economy, whereas the US GDP is shrinking if you factor for inflation, and per capita GDP is shrinking rapidly (since you have to factor inflation AND population growth, many people forget the latter). So more and more Americans cannot afford housing and move into apartments, the crisis will only get worse.

Want to know the REAL reason why the banks HAVE to be bailed out in the USA? Because if they release even just a few million of the 16 million houses they are withholding from the market, the US economy would instantly crash due to plummeting housing prices. In bankruptcy proceedings a bank would be forced to sell it's houses even for a loss to pay off creditors.

Please provide link that US GDP is shrinking. That would mean negative growth.

Again, reading too many zero hedge or RT articles. The stats out of China are not to be trusted.

[midas]

China orders audit of government debt

China has ordered a nationwide audit of all government debt, underlining fears that the recent slowdown in its economy may impact the financial sector.

Local governments in China borrowed heavily after the global financial crisis to try to sustain growth rates.

Debt may threaten China's growth, and there are growing fears that local governments may not be able repay.

http://www.bbc.co.uk/news/business-23486466

[Lancelot]

China still seems to be doing OK. Not fantastic growth, but still very decent. They've done a pretty good job with avoiding any sort of hard landing. But time will tell. Lots of issues there and if China sneezes, the whole world will catch a cold.

True China has a trade deficit with many countries, especially around Asia, so there would be some pain felt there. But with the US trade deficit with China, wouldn't it (US) experience less pain?

[midas]

It would be real nice if you'd include credible links when you make claims.

Link

Beijing Alone Has 50% More Vacant Housing Than The US

Submitted by Tyler Durden on 06/05/2012 10:16 -0400

Total housing inventory at the end of April rose 9.5 percent to 2.54 million existing homes available for sale, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March. Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.

So, broadly speaking: US: 2.5 million available homes; Beijing - one city in China - has 3.8 million??

The Beijing Public Security Bureau Population Administration Department said yesterday that have checked the information of the mobile population 725.5 million, mark the rental housing 1.39 million, checking vacant houses to 3.812 million.

That is all.

There is a key word you used there: "available for sale". The US has over 16 million empty houses that are not up for sale because the banks are holding them to try and keep up home prices. The reason is if they flood the market with homes prices would collapse much faster and it would trigger the very sort of housing collapse you are worried about in China which DOESN'T hold their properties off the market to inflate prices as the US is doing).

The US government reported there are 18.4 milliom empty housing units (mostly houses), and that means the US needs 47 million residents to fill them (since average people per housing unit is 2.6 in the US), whereas China's 64 million empty units are mostly apartments and China's average occupancy per housing unit is 1.4, so they need about 90 million people.

China has 5x the population but needs less than 2x as many people (90 million vs US' 47 million). In addition, China has a growing economy, whereas the US GDP is shrinking if you factor for inflation, and per capita GDP is shrinking rapidly (since you have to factor inflation AND population growth, many people forget the latter). So more and more Americans cannot afford housing and move into apartments, the crisis will only get worse.

Want to know the REAL reason why the banks HAVE to be bailed out in the USA? Because if they release even just a few million of the 16 million houses they are withholding from the market, the US economy would instantly crash due to plummeting housing prices. In bankruptcy proceedings a bank would be forced to sell it's houses even for a loss to pay off creditors.

Jingo you compare the vacant accommodation in China and USA. But wouldn't it be correct that in USA most if not all of those empty properties would be held by banks.? However in China it seems many vacant properties are under the control of what we would refer to as the “ shadow banking “ sector which now seems to be very much under the scrutiny of the new Chinese government and maybe curtailed considerably ? Do you see a difference there?

China Will Adjust Liquidity

According to analysts, shadow banking is the fastest sector to grow in the financial area right now. In 2010 for a 2-year period shadow banks ended up doubling their outstanding loans and that came to a whacking 36 trillion Yuan ($5.8 trillion). In GDP terms, that represents about 69% of China’s current GDP.

http://www.tothetick.com/china-will-adjust-liquidity

Edited July 29, 2013 by midas

[Pacificperson]

Bloomberg - Businessweek From new data says that China's economy will pass the US soon.

"If China’s economy isn’t already the largest today, it is probably a matter of months, not years, before it rises to the top."

http://www.businessweek.com/articles/2013-07-29/the-whole-world-is-getting-richer-and-thats-good-news#r=hp-ls

It is an interesting article and also it speaks to Thailand.

Edited July 29, 2013 by Pacificperson

[Lancelot]

China still seems to be doing OK. Not fantastic growth, but still very decent. They've done a pretty good job with avoiding any sort of hard landing. But time will tell. Lots of issues there and if China sneezes, the whole world will catch a cold.

True China has a trade deficit with many countries, especially around Asia, so there would be some pain felt there. But with the US trade deficit with China, wouldn't it (US) experience less pain?

[LawrenceChee]

I have done business in china for years and know the real estate business owners well and while I know there are a few sentimentalists who wish for old time sake that china would fail ...it won't

The business owners have the tenacity to full the empty cities in time to come... The cash flow they have ...they won't fail..the country is just hitting its strides and there is potential in the 2-4 tier cities for more growth for the new few decades before u see any reasonable slowdown

The difference is they have the same government for the next 10 years who does not argue just to get a point across it be different...u may say they have no choices or western style democracy and yet they are also some who argue this is the best stability model for a country this size that is growing at its own pace...

The new president is hawkish, hates debt and working behind the scenes to make it happen. I am sorry if he is boring to some or already groomed for the role 5 years ago...but this is how it works ...if u looks at the exec com u already have an inkling who's next after him in 10 years...

Now if u are comparing manners and how to behave in public yes the west still wins and are miles ahead ...so every one is happy now

[churchill]

A great China reckoning might not happen in quite the way you’d expect

http://ftalphaville.ft.com/2013/07/30/1585282/a-great-china-reckoning-might-not-happen-in-quite-the-way-youd-expect/

Preparing for China bubbles to burst

http://www.marketwatch.com/story/preparing-for-china-bubbles-to-burst-andy-xie-2013-07-29

Edited July 30, 2013 by churchill

[NeverSure]

China Stocks World’s Worst, Losing $748 Billion on Slump

By Richard Frost & Weiyi Lim - Jul 31, 2013 12:56 AM PT Bloomberg


Four years after China’s growth helped lead the global economy out of a recession and won the admiration of luminaries from billionaire George Soros to Nobel laureate Joseph Stiglitz, the nation’s stock market has lost more money for investors than any other in the world.

The Shanghai Composite Index (SHCOMP), which doubled in 10 months through August 2009 as the government poured $652 billion of stimulus into building roads, railways and housing, has tumbled 43 percent from its high, destroying $748 billion in market value. Only Greece’s ASE Index (ASE) has fallen more in percentage terms. The Standard & Poor’s 500 Index, the benchmark gauge of American equity, erased all of the losses from the worst recession since the Great Depression and has gained 68 percent since the China peak, reaching a record this month.
Enlarge image China Stocks Worst in World Losing $748 Billion on Lost Promises

July 30 (Bloomberg) -- Mark Mobius, executive chairman of Templeton Emerging Markets Group, talks about the Chinese government's plans to reduce overcapacity, the outlook for Chinese and Asian markets, and investment strategy. He spoke with Bloomberg's Tony Jordan in Bangkok yesterday. (Source: Bloomberg)

China looked unbeatable in 2009, surpassing Germany as the world’s third-largest economy and growing 6 percent in the first quarter while the U.S. shrank 4 percent. Templeton Emerging Markets Group Executive Chairman Mark Mobius, who oversees about $53 billion, said in July 2009 that China’s stock market could be larger than America’s in three years. Now, China is poised for the weakest expansion since 1990 as the government orders more than 1,400 companies to close factories.

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