Let us get rich first at any cost. Other problems will get solved automatically. That has been the Chinese motto for the last three decades. In total wealth terms they already have become the second biggest economy. But all the glitter of downtown Beijing and Shanghai cannot mask a lot of unpleasant facts. The get rich quick scheme aided and abetted by greedy American businessmen have created a corrupt and a metastable system in China which is unsustainable. The difference in rich and poor is enormous. The numbers of protests and riots have gone up tremendously. Arable land has shrunk. Eighty percent of water is polluted. The corrupt Chinese businessmen and politicians are keeping the economic numbers artificially inflated. Since rewards are related to performance, local governments lie and cheat to keep their numbers up. This has led to an un-sustainable system. Now even the greedy businessmen on the west are realizing that they have contributed to a bubble which will ruin the world economy.
Gordon Chang has written often on the subject. In one of his older articles he said that the state owned Chinese banks have given bad loans worth over $500 billion which they have no hope of remembering. In a newer article, he says that the Chinese investors are using a tax loophole to invest in real estate which has created a very big bubble. These guys are making and buying houses which are unoccupied. He says – “There were, a few months ago, 64.5 million urban flats that showed no electricity usage for six consecutive months. That’s one in four city apartments, enough housing for some 200 million people. The value of vacant apartments held by speculators is about 15% of gross domestic product. Beijing’s bank stress tests assume a 60% fall in property prices. In fact, official statistics show that property price increases slowed in July.
And there is more bad news for the residential market. Property developers, who are already building 20 million flats, have company. Local governments are constructing another 20-30 million, and other government agencies and companies are also building housing for employees”
So if the enemy i.e. the Chinese is in trouble why should the aam aadmi be worried? Well, one of the traits of the bullies (and cowards) is that they do not accept any blame and try to blame someone else and divert attention away from their mistakes. In India, the pseudo-secular crowd finds Hindu nationalists and the RSS to blame when they find themselves in a tight spot. The Pakistanis foment trouble with India when they are in trouble. We should expect the same from China. When the economic bubble bursts in China, then they will find someway to divert the attention of their populace. What better way than to whip up nationalistic hysteria by starting wars with neighbors? During the last earthquake in Sichuan province, the locals started to shout nationalistic slogans when Hu Jintao visited them instead of blaming the local governments for lack of help and faulty construction which ended up killing the only child they had. That is how brainwashed the Chinese populace is.
What can we do? As a population, nothing but we can hope that our government and the babus can foresee this and take steps to protect our nation. We can do this by fortifying our defenses and making the right friends by taking “the look east campaign” to the next level.
Gordon Chang has written often on the subject. In one of his older articles he said that the state owned Chinese banks have given bad loans worth over $500 billion which they have no hope of remembering. In a newer article, he says that the Chinese investors are using a tax loophole to invest in real estate which has created a very big bubble. These guys are making and buying houses which are unoccupied. He says – “There were, a few months ago, 64.5 million urban flats that showed no electricity usage for six consecutive months. That’s one in four city apartments, enough housing for some 200 million people. The value of vacant apartments held by speculators is about 15% of gross domestic product. Beijing’s bank stress tests assume a 60% fall in property prices. In fact, official statistics show that property price increases slowed in July.
And there is more bad news for the residential market. Property developers, who are already building 20 million flats, have company. Local governments are constructing another 20-30 million, and other government agencies and companies are also building housing for employees”
So if the enemy i.e. the Chinese is in trouble why should the aam aadmi be worried? Well, one of the traits of the bullies (and cowards) is that they do not accept any blame and try to blame someone else and divert attention away from their mistakes. In India, the pseudo-secular crowd finds Hindu nationalists and the RSS to blame when they find themselves in a tight spot. The Pakistanis foment trouble with India when they are in trouble. We should expect the same from China. When the economic bubble bursts in China, then they will find someway to divert the attention of their populace. What better way than to whip up nationalistic hysteria by starting wars with neighbors? During the last earthquake in Sichuan province, the locals started to shout nationalistic slogans when Hu Jintao visited them instead of blaming the local governments for lack of help and faulty construction which ended up killing the only child they had. That is how brainwashed the Chinese populace is.
What can we do? As a population, nothing but we can hope that our government and the babus can foresee this and take steps to protect our nation. We can do this by fortifying our defenses and making the right friends by taking “the look east campaign” to the next level.
Hedge funds bet China is a bubble close to bursting
By Louise Armitstead
The manager, who wanted to remain anonymous, said: “The Chinese delegation has said all week that there will be double-digit growth for years to come and the Brits have lapped it up. But the data doesn’t add up. We think we’ve experienced credit bubbles over the past few years, but China is the biggest. And yet the global economy is looking to China as not just a crutch but a springboard out of the recession. It’s crazy.”
The article can be read at:http://www.telegraph.co.uk/finance/economics/8261740/Hedge-funds-bet-China-is-a-bubble-close-to-bursting.html
The Gordon Chang article can be read at:
http://www.forbes.com/2010/08/12/china-property-electricity-asia-opinions-columnists-gordon-g-chang.html
Amazing Satellite Images Of The Ghost Cities Of China
The hottest market in the hottest economy in the world is Chinese real estate. The big question is how vulnerable is this market to a crash.
One red flag is the vast number of vacant homes spread through China, by some estimates up to 64 million vacant homes.
We've tracked down satellite photos of these unnerving places, based on a report from Forensic Asia Limited. They call it a clear sign of a bubble: "There’s city after city full of empty streets and vast government buildings, some in the most inhospitable locations. It is the modern equivalent of building pyramids. With 20 new cities being built every year, we hope to be able to expand our list going forward."
See the Real Satellite Images: http://www.businessinsider.com/pictures-chinese-ghost-cities-2010-12?slop=1
By Louise Armitstead
The manager, who wanted to remain anonymous, said: “The Chinese delegation has said all week that there will be double-digit growth for years to come and the Brits have lapped it up. But the data doesn’t add up. We think we’ve experienced credit bubbles over the past few years, but China is the biggest. And yet the global economy is looking to China as not just a crutch but a springboard out of the recession. It’s crazy.”
The article can be read at:http://www.telegraph.co.uk/finance/economics/8261740/Hedge-funds-bet-China-is-a-bubble-close-to-bursting.html
The Gordon Chang article can be read at:
http://www.forbes.com/2010/08/12/china-property-electricity-asia-opinions-columnists-gordon-g-chang.html
Amazing Satellite Images Of The Ghost Cities Of China
The hottest market in the hottest economy in the world is Chinese real estate. The big question is how vulnerable is this market to a crash.
One red flag is the vast number of vacant homes spread through China, by some estimates up to 64 million vacant homes.
We've tracked down satellite photos of these unnerving places, based on a report from Forensic Asia Limited. They call it a clear sign of a bubble: "There’s city after city full of empty streets and vast government buildings, some in the most inhospitable locations. It is the modern equivalent of building pyramids. With 20 new cities being built every year, we hope to be able to expand our list going forward."
See the Real Satellite Images: http://www.businessinsider.com/pictures-chinese-ghost-cities-2010-12?slop=1
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