5 ms·

> what we have in China is much worse than japan since artificial intervention is much deeper and prolonged I think it's the question of whether or not it's go

by rqs 8y ago

> what we have in China is much worse than japan since artificial intervention is much deeper and prolonged I think it's the question of whether or not it's going to pop. If the housing bubble did popped, then we are screwed a big time, worse than what Japanese once had. But if it didn't, then the leverage is still there and economy maybe low at worse, but stable. I don't think everything is concluded at this point, because SSE 000001[0] is showing sign of very slow recover. And the censorship on economic news in my opinion is rather one effort to preventing domino effect. [0] https://www.google.com/search?ei=P3KzW_6LF4fUwQKM77uYAg&btnG=Search&q=SSE+000001 https://www.google.com/search?ei=P3KzW_6LF4fUwQKM77uYAg&btnG...

seanmcdirmid 8y ago
If the property bubble doesn’t pop, you are more screwed as the asset and real economies further diverge. China can’t be world competitive if a 70sqm apartment goes for a million bucks, people/companies will start relocating to cheaper places like say San Francisco. A lot of economic potential is directed toward real estate and away from more productive endeavors. I remember the shops outside of my old office in zhongguancun all concerting to real estate offices. Cafes, restaurants, stores can’t compete. If China wants to take the next step in their economic development, they have to give up on this bubble. It will suppress a lot more economic activity than it stimulates, even if capital is preserved it isn’t doing anything useful.
- mistermann 8y ago
  > China can’t be world competitive if a 70sqm apartment goes for a million bucks, people/companies will start relocating to cheaper places like say San Francisco. "China is Now More Expensive than the USA": https://www.youtube.com/watch?v=32t8d2eQJAA https://www.youtube.com/watch?v=32t8d2eQJAA Almost everyone laughs when I say they should get some of their news from people who actually live in China rather than thinking something needs to be printed in the newspaper before it is true.
  - seanmcdirmid 8y ago
    Note that was a hypothetical: a 70 sqm apartment in Beijing ATM is around $500k, but if the prices keep rising. That is still more expensive than most places in the states, but not more than SF (if you could find such a thing). Beijing isn’t even the most expensive market in China.
  - rqs 8y ago
    From the comment section of that very video, I quote: > Freda Du: are you guys comparing one of the most expensive chinese cities with the average american (suburban/rural) rent? And comparing fine western dining (cuz apparently you think the $2 chinese meals will kill westerners..) with dollar menu? I lived in Shanghai, LA and NYC, let's make a major city to major city comparison here.. a single metro ride is $0.5 in shanghai vs. $2.75 in NY and $1.75 in LA (which goes nowhere); cellphone bill costs $10 in China and $40+ in the US; you can get food as cheap as $2 in a sit-down restaurant in China, but at least $10+tax&tips in America; have you guys just been living in China for too long and forgot how damn expensive america can be? the small Chinese cities can be dirt cheap too but you guys think it's too inconvenient for people who refuse to speak Chinese. so there you go. For your reference, I'm living in a small city in China, where ￥15 can supply my diet-mode food for a week, for better diet, that's ￥22 ($3.2 dollar) (Just to clarify, If however I don't want to diet, then that's ￥50~80 or $12 a week). That's even when I buy most of my foods from supermarket[0]. The key point is, you CAN live an expensive life in China if you want to, but you don't HAVE to. [0] https://i.imgur.com/X9Gm4Zl.jpg https://i.imgur.com/X9Gm4Zl.jpg
    - seanmcdirmid 8y ago
      China is not expensive. Rent is actually cheap: that place on the market in beijing for $1 million USD will rent for less than $2k/month, for example. Food can be cheap, not as cheap as 22 RMB/week (heck, even in Chenzhou I'm not sure who could do that), but $5/person for a decent meal out and cheaper if cooking in. Cars are super expensive compared to the states, so is gas. Real estate prices are insane, but again rents are much cheaper because most of that run up is imaginary and unsustainable. Education is super expensive if you don't have a hukou (which foreigners will never get). Clean air is impossible to buy.
- rqs 8y ago
  I think what the government is trying to do is to increase people's income, so it can match the level of housing bubble. Many people think it's a goal that is to hard to reach in time (year 2025 or so), but the overall direction is about right. However, all of that is before the trade war thing. So what does the future actually holds is a bigger unknown by now.
  - seanmcdirmid 8y ago
    That makes no sense and would be much worse than just popping the bubble: either China will be extremely uncompetitive with the rest of the world, or they will deprecate the RMB like crazy. The property bubble really isn’t worth preserving.

by rqs 8y ago

seanmcdirmid 8y ago

If the property bubble doesn’t pop, you are more screwed as the asset and real economies further diverge. China can’t be world competitive if a 70sqm apartment goes for a million bucks, people/companies will start relocating to cheaper places like say San Francisco. A lot of economic potential is directed toward real estate and away from more productive endeavors. I remember the shops outside of my old office in zhongguancun all concerting to real estate offices. Cafes, restaurants, stores can’t compete. If China wants to take the next step in their economic development, they have to give up on this bubble. It will suppress a lot more economic activity than it stimulates, even if capital is preserved it isn’t doing anything useful.

mistermann 8y ago
> China can’t be world competitive if a 70sqm apartment goes for a million bucks, people/companies will start relocating to cheaper places like say San Francisco. "China is Now More Expensive than the USA": https://www.youtube.com/watch?v=32t8d2eQJAA https://www.youtube.com/watch?v=32t8d2eQJAA Almost everyone laughs when I say they should get some of their news from people who actually live in China rather than thinking something needs to be printed in the newspaper before it is true.
- seanmcdirmid 8y ago
  Note that was a hypothetical: a 70 sqm apartment in Beijing ATM is around $500k, but if the prices keep rising. That is still more expensive than most places in the states, but not more than SF (if you could find such a thing). Beijing isn’t even the most expensive market in China.
- rqs 8y ago
  From the comment section of that very video, I quote: > Freda Du: are you guys comparing one of the most expensive chinese cities with the average american (suburban/rural) rent? And comparing fine western dining (cuz apparently you think the $2 chinese meals will kill westerners..) with dollar menu? I lived in Shanghai, LA and NYC, let's make a major city to major city comparison here.. a single metro ride is $0.5 in shanghai vs. $2.75 in NY and $1.75 in LA (which goes nowhere); cellphone bill costs $10 in China and $40+ in the US; you can get food as cheap as $2 in a sit-down restaurant in China, but at least $10+tax&tips in America; have you guys just been living in China for too long and forgot how damn expensive america can be? the small Chinese cities can be dirt cheap too but you guys think it's too inconvenient for people who refuse to speak Chinese. so there you go. For your reference, I'm living in a small city in China, where ￥15 can supply my diet-mode food for a week, for better diet, that's ￥22 ($3.2 dollar) (Just to clarify, If however I don't want to diet, then that's ￥50~80 or $12 a week). That's even when I buy most of my foods from supermarket[0]. The key point is, you CAN live an expensive life in China if you want to, but you don't HAVE to. [0] https://i.imgur.com/X9Gm4Zl.jpg https://i.imgur.com/X9Gm4Zl.jpg
  - seanmcdirmid 8y ago
    China is not expensive. Rent is actually cheap: that place on the market in beijing for $1 million USD will rent for less than $2k/month, for example. Food can be cheap, not as cheap as 22 RMB/week (heck, even in Chenzhou I'm not sure who could do that), but $5/person for a decent meal out and cheaper if cooking in. Cars are super expensive compared to the states, so is gas. Real estate prices are insane, but again rents are much cheaper because most of that run up is imaginary and unsustainable. Education is super expensive if you don't have a hukou (which foreigners will never get). Clean air is impossible to buy.
rqs 8y ago
I think what the government is trying to do is to increase people's income, so it can match the level of housing bubble. Many people think it's a goal that is to hard to reach in time (year 2025 or so), but the overall direction is about right. However, all of that is before the trade war thing. So what does the future actually holds is a bigger unknown by now.
- seanmcdirmid 8y ago
  That makes no sense and would be much worse than just popping the bubble: either China will be extremely uncompetitive with the rest of the world, or they will deprecate the RMB like crazy. The property bubble really isn’t worth preserving.