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In my dealing with China's economists, I have found them to be very well educated and conservative. Just what you'd want/expect from an economist. I also foun

In my dealing with China's economists, I have found them to be very well educated and conservative. Just what you'd want/expect from an economist. I also found the government leaders listen to them. Possibly more so than we have done in the U.S. I doubt they have any choice at this point but to leverage debt to keep the economy fueled. Lets hope they find a better balance and know when to reign it it than the U.S. did. All said, its probably a good thing they are in the debt game as it keeps the playing field leveled. They have reigned in the housing market a bit. For example, they keep adjusting the amount you have to put down on a home. What used to be 15% to 30% in some areas has gone to 30 or 50%. Yep, you could never buy a home in China for 5% down!

trevelyan 17y ago
Here in Beijing it's been interesting to watch the effects of stimulus on the housing market. The government is promoting growth by giving lots of cash to larger organizations and entities, which in turn give them to a couple of people who quickly buy real estate. The result is that prices are rising and falling in large amounts quickly depending on what the government is doing. (On a side note, most of the Party members I've known have been involved in real estate, so I don't think it's accidental that there are systemic pressures to support the real estate market.) That said, home ownership is still out of the reach of most of the common people. I think the article is about dead wrong. China has a problem with its banking sector, And the stock markets are ridiculous since corporate profit is tied to real estate prices. But China still does not have a problem. The four big banks will be bailed out of their losses by the center (the last giveaway was 54 billion) and when you think of it this way, China isn't leveraging debt so much as spending credit to keep itself afloat. The ignorance at the WSJ is hilarious. Who is keeping them in business?
- philwelch 17y ago
  "The ignorance at the WSJ is hilarious. Who is keeping them in business?" Rupert Murdoch.

trevelyan 17y ago

Here in Beijing it's been interesting to watch the effects of stimulus on the housing market. The government is promoting growth by giving lots of cash to larger organizations and entities, which in turn give them to a couple of people who quickly buy real estate. The result is that prices are rising and falling in large amounts quickly depending on what the government is doing. (On a side note, most of the Party members I've known have been involved in real estate, so I don't think it's accidental that there are systemic pressures to support the real estate market.) That said, home ownership is still out of the reach of most of the common people. I think the article is about dead wrong. China has a problem with its banking sector, And the stock markets are ridiculous since corporate profit is tied to real estate prices. But China still does not have a problem. The four big banks will be bailed out of their losses by the center (the last giveaway was 54 billion) and when you think of it this way, China isn't leveraging debt so much as spending credit to keep itself afloat. The ignorance at the WSJ is hilarious. Who is keeping them in business?

philwelch 17y ago
"The ignorance at the WSJ is hilarious. Who is keeping them in business?" Rupert Murdoch.