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Meanwhile in China

RPM

By RPM
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atomheartbevo

atomheartbevo 89,729

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2 hours ago, Superhero said:

Just hope the leadership won't try to wag the dog and start something stupid to distract the masses from their internal issues.

They also have to be very careful that it doesn’t make things worse for the masses economically, etc.  The egg business in Russia is a far greater deal than a lot of people in the West realize, and in some ways is causing more issues/headaches for Putin than the opposition against the Special Military Operation. When you hit the masses directly in the wallet in some way (or cause other hardships that are felt immediately), you get rumbling. 

Speaking of Russia, look at how China has very carefully walked the line in terms of not getting sanctioned by the West while still selling Ali Babba shit to Russia - now more than ever, they can’t risk pissing off the US and losing access to Western investments, markets, food imports, etc. because of all of their internal economic problems.  When you start losing your largest real estate development companies to bankruptcy, you gotta keep outside money coming in to invest.

This Evergrande shit is possibly just the start as well, and here’s your wag the dog situation: irony of ironies, some are talking about loosening things up so more people can buy their own property/home or invest.  Selling that to the masses would be interesting, but loosing restrictions on buying or investing also seems like it encourages risky behavior,

https://finance.yahoo.com/video/chinas-evergrande-liquidiation-trillion-dollar-161056718.html

Quote

China's largest property developer Evergrande (3333.HK) faces liquidation after courts deemed the company incapable of delivering on restructuring plans. The Chinese economy contends with uncertainties as officials attempt to inject a stimulus package of $278 billion (2 trillion Chinese yuan) back into markets.

Quote

Meyer, Unkovic & Scott Partner Dennis Unkovic comments on contagion fears associated with Evergrande's liquidation for both China's property sector and its markets.

"It reminds me a little bit of the Lehman Brothers moment. When Lehman Brothers went down, there was a question about how it would spread. You have other companies like Evergrande, for example, Country Garden (2007.HK), that have similar debts," Unkovic says. "Country Garden is now the largest private real estate company in China, and it has similar problems to Evergrande. The problem is it isn't over, and it really may just be beginning."

 

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Brisketexan
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It's honestly surprising more companies haven't moved on their own sooner. They lose enormous amounts of money and market share to Chinese intellectual property theft. China has spent decades now

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atomheartbevo

atomheartbevo 89,729

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6 minutes ago, atomheartbevo said:

This Evergrande shit is possibly just the start as well, and here’s your wag the dog situation: irony of ironies, some are talking about loosening things up so more people can buy their own property/home or invest.  Selling that to the masses would be interesting, but loosing restrictions on buying or investing also seems like it encourages risky behavior,

Loosening restrictions on home ownership or investments, not loosing.

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Wally Fairway

Wally Fairway 5,559

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13 hours ago, atomheartbevo said:

 Selling that to the masses would be interesting, but loosing restrictions on buying or investing also seems like it encourages risky behavior,

Compare and contrast with USA capitalism encouraging home ownership by making mortgage interest and property taxes deductible for federal taxes and having Fannie and Feddie back stop the failing mortgage banking industry when the corrupt wheels fell off?
 

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atomheartbevo

atomheartbevo 89,729

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14 minutes ago, Macanudo said:

Zeihan thinks that there is close to 1.5 billion empty housing units and says it could be closer to double that.  Even if it's only half of the lesser number that's insane.

Given the corruption, it wouldn’t be surprising.  To me, what’s insane is them talking about loosening restrictions on property investment and ownership.  Seems like that could lead to more Evergrandes and Country Gardens.

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BurntEyes

BurntEyes 6,002

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1 hour ago, atomheartbevo said:

Given the corruption, it wouldn’t be surprising.  To me, what’s insane is them talking about loosening restrictions on property investment and ownership.  Seems like that could lead to more Evergrandes and Country Gardens.

It could and if you couple it with the aforementioned Freddy/Fanie concerns could potentially increase the failure risk. 

It's a double edge blade because if either/both Evergrandes/Country Gardens goes under that will create an issue. Without their equally bad replacements it leaves a pretty big leak without anyone to fill it. However, a replacement is probably just prolonging the inevitable.

It's not good either way.

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UT_OB1

UT_OB1 2,224

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3 hours ago, Macanudo said:

Zeihan thinks that there is close to 1.5 billion empty housing units and says it could be closer to double that.  Even if it's only half of the lesser number that's insane.

I know nothing about housing in China. Are these alleged 1.5 billion homes two story 2500 sqft homes on 1/4-1/2 acre lots, or more like 300 sqft “condos” to house people in mass as densely as possible?

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wild_turkey

wild_turkey 3,167

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That NPR link talks about the real estate crisis causing deflation in China and then needing to export some of that deflation, so then Chinese goods in the U.S. would become less expensive and that forces competitors to also lower their prices to remain competitive.

That all makes sense but it’s also hard to imagine Chinese shit getting cheaper.

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Schulz2.0

Schulz2.0 28,960

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33 minutes ago, UT_OB1 said:

I know nothing about housing in China. Are these alleged 1.5 billion homes two story 2500 sqft homes on 1/4-1/2 acre lots, or more like 300 sqft “condos” to house people in mass as densely as possible?

I believe it's mainly large apartment/condo buildings.

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BurntEyes

BurntEyes 6,002

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3 minutes ago, cabowabo said:

 

I'm not sure I would have thrown my kids off the balcony for her, but maybe my dog.  

https://www.dailymail.co.uk/news/article-13028547/Chinese-couple-executed-father-killed-two-toddlers-throwing-15th-floor-balcony-new-girlfriend-saw-burden-future-together.html

 

52373837-10355915-image-a-70_1640874421441.jpg

I don't even think I'd throw your toddlers or dogs off the tower much less mine. 🤔 Could I just throw him instead? 

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Superhero

Superhero 8,830

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2 hours ago, cabowabo said:

 

I'm not sure I would have thrown my kids off the balcony for her, but maybe my dog.  

https://www.dailymail.co.uk/news/article-13028547/Chinese-couple-executed-father-killed-two-toddlers-throwing-15th-floor-balcony-new-girlfriend-saw-burden-future-together.html

 

52373837-10355915-image-a-70_1640874421441.jpg

 

That's fucked up.

Dude is good looking. He could have easily found another GF who didn't want to kill his cute kids.

 

image.png.297b8f39bbcdc5d41e77434400d8b3d6.png

 

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Bevo

Bevo 13,579

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The West hasn’t grasped the scale of the disaster facing China

Our treasured illusions about how Xi will react to his country sinking are about to unravel

Matthew Henderson8 February 2024 • 6:00am
The Telegraph
 
 

It’s the last surviving relic of a past world, where extended families gathered at their home villages to share respectful greetings to the old, wishes for prosperity (“Gong xi fa cai” in Mandarin) among the younger generation, and joy at the births of new heirs and descendants.

Nearly 40 years of the coercive One Child Policy, not to speak of uncounted deaths from Covid-19 among the elderly last Spring Festival, has taken an irreversible demographic toll on festival jollity.

This year it is snow, not the pandemic, that is disrupting travel and spoiling the party. But this too is a starkly apt metaphor for the wintry grip of Xi Jinping’s authoritarian power. “Good wishes, get rich” rings hollow in these days of economic stagnation and decline.

At home and abroad, much attention was paid on February 6 to an extraordinary Chinese stock market rally, apparently based largely on news that Xi Jinping was in conclave with market regulators over new measures to revive market confidence.

No doubt the timing of this characteristically command economy intervention was carefully chosen to evoke festive cheer. Anyone in the West buying into it, however, needs to take a step back and think again. After all, the rise was led by recognisably state-directed investors.

For years Xi has made much of his achievements in “lifting millions out of poverty”, quietly ignoring the point that this was more about removing Communist ideological blockers to prosperity than it was implementing a better-balanced economic model.

This year, the other shoe has fallen. Bad loans, rent-seeking by inept local government and state-owned enterprises overproducing led to a disastrous property bubble that has now burst. The 30pc share that the property sector held in the economy is now a millstone dragging it into the mire, with other sectors falling into disarray around it.

Beyond the immediate crisis, things aren’t much better in the longer term. China’s workforce is ageing and shrinking, creating a headwind for growth. Younger generations, meanwhile, are increasingly disaffected. Youth unemployment hit a record high of over 21pc in June 2023. The Government’s response was to stop publishing the figures. Small wonder then that market sentiment is so cautious.

While Western media outlets are increasingly willing to publish harsh criticisms of the Chinese leadership’s economic ineptitude, international institutions are still treading cautiously. In December, the World Bank published a readable, elegant China Economic Update which outlined in meticulous detail the quantitative evidence for a slew of ills currently afflicting the Chinese economy.

As befits the organisation’s expertise and credibility, the report also offers a series of suggestions as to what it would be “appropriate” for China to do to revive its fortunes. Given the degree to which Xi Jinping has taken personal control of the levers of state power, he is unquestionably the sole arbiter of high-level economic policy. It’s accordingly of note that there is nowhere in the entire 58-page document a single reference to the Chinese Communist Party (CCP), let alone Xi Jinping.

Diplomatic niceties and corporate nerves mean that this failure to name names is replicated in much heavy-weight Western assessment and analysis. The result is a widespread, misguided impression that China has an economy run much like any Western free market, with issues that might “appropriately” be dealt with in a relatively conventional manner.

It is probably true that a well-planned and executed programme of coordinated reforms could lessen a number of China’s current economic headwinds. But they will not be so dealt with, because that is not what Xi Jinping does.

An artificial, short-term surge in market optimism whipped up by the February 6 buying spree does not amount to a credible policy for fixing the mess that the CCP has made of its post-Covid revival, or for liberal economic reforms.

Xi Jinping has a completely different agenda, which includes such economically risky aims as annexing Taiwan, and continuing his support for Putin’s Russia. All his intervention in the stock market has done is highlight how irrelevant conventional market forces are in China.

 

Most rational Western analysis agrees that economic engagement with the PRC is unavoidable. China’s economy is locked in a population doom spiral, loaded with bad debts. But as bad as the economic situation is, the political risks should weigh even heavier.

China’s national strategy under Xi is driven by a political, military and economic contest with the West. The autocrat has staked his reputation on hard, exclusive Chinese nationalism and independence from the Western-led rules-based order. He has already shown in Hong Kong something of his intentions for Taiwan.

Last year, it was reported that 68pc of major corporations bought political risk insurance in 2022, compared with 25pc in 2019. China, where firms are subject to sudden expropriation, and operate at the whim of political overlords, was seen as a particular risk factor, and one it was increasingly hard to insure.

The US investment bank chief executive who last September said he was “highly cautious” about Chinese risk in late November stated bluntly that if there was war in Taiwan, all bets would be off; his bank would exit China if the US government ordered him to.

Economists and business analysts focusing on the prospects for a rise in GDP or a fall in unemployment are focusing on entirely the wrong issues. Our understanding of the Chinese economy was flawed, failing to see how much was built on debt and thin air.

The next thing to unravel could be our last, treasured illusions about how Xi will react to his country sinking into an economic mire, with a falling population. It’s time to prepare for a new cold war.

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atomheartbevo

atomheartbevo 89,729

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On 2/12/2024 at 12:39 PM, Bevo said:

Younger generations, meanwhile, are increasingly disaffected. Youth unemployment hit a record high of over 21pc in June 2023. The Government’s response was to stop publishing the figures. Small wonder then that market sentiment is so cautious.

@Schulz2.0 I'm wondering if the part about "a sign of authorities’ increasing concern about social and political instability” is related to the youth problems above.

I don't know what 21% of the youth being unemployed means in China, but I'm assuming that it's in the upper tens of millions, if not hundreds of millions in a nation of 1.4 billion people.  That would be a lot of social upheaval for Beijing if things went south.

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Brisketexan

Brisketexan 105,155

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[mention=273]Schulz2.0[/mention] I'm wondering if the part about "a sign of authorities’ increasing concern about social and political instability” is related to the youth problems above.
I don't know what 21% of the youth being unemployed means in China, but I'm assuming that it's in the upper tens of millions, if not hundreds of millions in a nation of 1.4 billion people.  That would be a lot of social upheaval for Beijing if things went south.

We should always be concerned about youth in Asia.
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B00M

B00M 6,419

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28 minutes ago, Schulz2.0 said:

At this point you just have to assume any personal info you’ve got is compromised. Freeze your credit, freeze your kids credits, and pepper your angus

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Macanudo

Macanudo 12,989

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2 hours ago, B00M said:

At this point you just have to assume any personal info you’ve got is compromised. Freeze your credit, freeze your kids credits, and pepper your angus

I am just going to salt my angus.    That will tenderize it better.   But you do you.

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troph

troph 24,854

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Posted
5 hours ago, YGIFS said:

Dibs on ‘Pepper Your Angus’ for band name/#37 special at Suzi’s restaurant.  

How many bands are you managing these days? You have reserved like 8983 band names on this board.

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YGIFS

YGIFS 19,452

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Well then you’re not invited to our music festival at the eclipse with that crappy attitude.  
 

and for your information, I don’t manage them.  I play cowbell in all of them.  

Edited by YGIFS
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InkaUtexas

InkaUtexas 25,986

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Millions of Americans' online accounts have been caught up in a "sinister" Chinese hacking plot that targeted US officials, the justice department and FBI said on Monday.

Seven Chinese nationals have been charged with enacting a widespread cyber-attack campaign.

They are accused of ties to a hacking operation that ran for 14 years.

The US state department announced a reward of up to $10m (£8m) for information on the seven men.

The justice department said hackers had targeted US and foreign critics of China, businesses, and politicians.

https://www.bbc.com/news/world-us-canada-68659095

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Captainant

Captainant 27,680

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Posted
11 minutes ago, Orange&White said:

Why are we still pretending to be friends with China and doing business with them?

That line ain't gonna go up on it's own, dawg. There's quite a few business interests intertwined with Chinese money from the mid/late twenty-teens. Who do you think makes basically all of the consumer electronics that we all enjoy?

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utee94

utee94 15,832

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China's no longer a low-cost manufacturing nation for many of the products that the US shifted over there during the past 2-3 decades.  And American companies have been starting to move manufacturing out of China for several years now, the pandemic exacerbated the problems and sped up the timelines for many of those companies.

But it took decades to get here and it'll take the same to unwind it.

 

 

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ConferenceRoom

ConferenceRoom 6,144

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25 minutes ago, utee94 said:

China's no longer a low-cost manufacturing nation for many of the products that the US shifted over there during the past 2-3 decades.  And American companies have been starting to move manufacturing out of China for several years now, the pandemic exacerbated the problems and sped up the timelines for many of those companies.

But it took decades to get here and it'll take the same to unwind it.

 

 

Yep. The great hedging has been in full swing at my company for at least three years. 

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