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Sound like China is planning ahead. Contrast this with the American problem of nothing new being built: http://www.bloomberg.com/news/articles/2015-05-07/here-

Sound like China is planning ahead. Contrast this with the American problem of nothing new being built: http://www.bloomberg.com/news/articles/2015-05-07/here-s-how-much-new-york-and-san-francisco-s-tight-housing-markets-are-hurting-the-economy http://www.bloomberg.com/news/articles/2015-05-07/here-s-how...

adventured 11y ago
That sounds fine, if it all works out as planned. China is about to become the most indebted nation. At the rapid pace they're accumulating debt, that should happen within the next few years. They've spent wildly to keep the building spree going; even now their real estate market is crashing, it has been falling for a year. It begs a simple question: how many more people can China transition out of old China's poverty, and into the new China's middle class, before they run out of the ability to accumulate more debt to keep it all going (global consumers are tapped out, which has left China's manufacturing boom dead in the water, with their PMI contracting during a supposed non-recessionary period). I fail to see how thinking ahead equates to taking on tens of trillions in new debt to fake economic growth. That sounds like they're baking up an economic recipe for future stagnation.
- coliveira 11y ago
  Excellent comment. China overdid their stimulus package in 2008 because of the need to keep the jobs coming. If would have been much better for them if they had used 2008 to slow the growth rhythm to something sustainable (4 to 5%). I think they are now headed to a very difficult transition, probably Japanese-style, because of so much debt.
  - gbog 11y ago
    I don't know for Chinese gov but I know for sure that Chinese families are not used to buy expensive things with money they don't have, so no, I don't agree: China as a whole has a lot of real money in the pockets.
    - coliveira 11y ago
      This doesn't make any difference. The Japanese are even more frugal than the Chinese, that is why they have been able to support a deflationary economy for more than 20 years.

adventured 11y ago

That sounds fine, if it all works out as planned. China is about to become the most indebted nation. At the rapid pace they're accumulating debt, that should happen within the next few years. They've spent wildly to keep the building spree going; even now their real estate market is crashing, it has been falling for a year. It begs a simple question: how many more people can China transition out of old China's poverty, and into the new China's middle class, before they run out of the ability to accumulate more debt to keep it all going (global consumers are tapped out, which has left China's manufacturing boom dead in the water, with their PMI contracting during a supposed non-recessionary period). I fail to see how thinking ahead equates to taking on tens of trillions in new debt to fake economic growth. That sounds like they're baking up an economic recipe for future stagnation.

coliveira 11y ago
Excellent comment. China overdid their stimulus package in 2008 because of the need to keep the jobs coming. If would have been much better for them if they had used 2008 to slow the growth rhythm to something sustainable (4 to 5%). I think they are now headed to a very difficult transition, probably Japanese-style, because of so much debt.
- gbog 11y ago
  I don't know for Chinese gov but I know for sure that Chinese families are not used to buy expensive things with money they don't have, so no, I don't agree: China as a whole has a lot of real money in the pockets.
  - coliveira 11y ago
    This doesn't make any difference. The Japanese are even more frugal than the Chinese, that is why they have been able to support a deflationary economy for more than 20 years.