Chinese Economy About to Collapse?

[xiongmao]

OK so I don't know about countries, but I have a long history of my employers imploding just after I leave them!

I've been hearing a lot of rumours about China recently, and the stock market speaks for itself (now down 20% - official bear market territory).

So did I get the hell out just in time?

In Guangzhou there was rampant building of shopping malls and apartment blocks. Most were occupied. But then this is probably China's most booming city, and housing is hard to come by.

But in lesser cities I visited there was rampant over-building. It was most noticeable in and around Zhuhai.

I also saw bubble evidence: a few half-empty shopping malls in less desirable areas, an abandoned skating rink at the top of a Guangzhou shopping mall, and (most iconic of all?) an apparently closed down ferris wheel on the top of a Dongguan shopping mall. I guess that banks will have stumped up the cash for these follies.

Plus so much new stuff was falling apart - the stuff built for the 2010 Asian Games was just woeful.

Everyone is busy in China. But not much was getting done. Most of the stuff I bought for my apartment was just total junk. And it wasn't that cheap either.

Biggest red flag of all for me... I met a lady who owned an apartment and she was moving out because she couldn't afford to live there and pay the mortgage. This was a lady who hadn't even bought the place in the bubble years. It's difficult to see the Chinese consumer coming to the rescue - they don't have any money, or any free time in which to spend it.

If the Chinese economy does crash then trust me you wouldn't want to be in China. I saw enough to convince me that Chinese people can be very barbaric. Fighting to get on buses, no regard for animals, no regard for safety... yikes. Plus add on the government's love of blaming foreigners (Westerners in Beijing, Japan for anything else) and people who follow the official party line like sheep.

It could also go very badly wrong for China if a shooting war broke out. China has very few friends on the global stage. Aside from North Korea, maybe no friends at all. China takes a lot, but gives nothing. Japan and the USA have vastly superior technology. The Chinese can't even make a cheap kettle that doesn't scald your hand when the water boils. And China can't also feed itself, plus the food quality is absolute junk compared to Thailand. There is no way that China could manage a war and keep the lid on internal dissent.

Well let's see what happens...

[germanguy]

no...

[Taco]

I don't think the Chinese economy will crash until next year unless WW3 breaks out. However, China has been building vacant cities for years like Ordos while lying about all their economic data to keep everyone calm. This past week the Chinese bank to bank lending rate shot up unexpectedly which is an ominous sign. The same lending rate spike occurred in America before the 2008 US financial crisis.

[Jester]

Good OP, xongmai, but I come down with germanguy and taco.

No total collapse unless a war.

And China is EXTREMELY cautious about war. Very cautious people, and not very military-minded.

My economist son has been there a few times, and had told me about the commercial real estate bubble. So yes, as you point out, that bubble has to collapse, foreclosures have to happen. Maybe more like the Houston bubble here in the U.S. in the 80's.

OK China misallocated credit to real estate construction by aping U.S. bias toward debt and real estate. So a lot of money has been burned through. OK. But all those workers who got construction jobs were getting real pay for real work. No welfare, bullshit grants to education and NGO's, etc. Wasteful as it is, the Red Chinese squandering of resources is less cancerous than ours.

Good point about being a visible gweilo if riots do break out, though.

Don't agree that China has no friends. Burma, Laos, plus friends in east Africa too. Good trade relations with Chile, Panama, even with Armenia.

OK they are hated by Vietnam, Mongolia, and the U.S. puppet government in Japan -- but so what?

I could see a military coup there, that would give land to the peasants, and nationalize some of the oligarchs' companies where wealth is due to obvious corruption. Coup leaders would claim to be democratic reformers, but still nominally Communist. Kind of a Yeltsin phase.

With or without a coup, the solution to their economic problems is to pump up internal demand through higher birthrate. Ending taxes on additional children would do that.

Best investment right now IMO would be a baby-carriage factory in China.

[Repatriate]

I don't think Xiongmao is wrong when he says China doesn't have any friends. China has a lot of business partners and client states (Myanmar, North Korea, etc..) but it has no true ideological or cultural allies. If let's say Britain were to enter a war there are plenty of anglophone countries who would join on Britain's side simply out of ideological, political, and cultural reasons. Even when most of the world despised the U.S. entering into Vietnam or the Iraq war you had plenty of anglophone countries who secretly supported or even sent troops. An example would be Australians who participated in the Vietnam war.


China in this regard is very isolated. You wouldn't see majority ethnic Chinese countries like Singapore or Taiwan joining China in their wars anytime soon.

[momopi]

China does not have strong ideological & military alliances abroad today because the PRC government had mostly chosen to "opt out" of the Cold War. While the USSR and Warsaw Pact alliances fell apart, NATO is still around. Things are slowly changing with SCO, BRIC, etc. as some old border disputes are resolved and member states dip their toes with limited military exercises ("anti-terrorism drills"). But the legacy of China's preference for not getting into military alliances remains.

In terms of military, those who want to match China's military capability directly versus the US today, or are dismissive of China's military advances do not really understand where China's strengths are. Back in 2000, China's military was perhaps the world's largest open-air museum, with the Chinese military trying to buy military hardware from abroad to modernize its forces. The Chinese Air Force did not have AWACS system (Airborne Warning and Control System) and tried to purchase from Israel for $1 billion, which the US blocked in 2000.

Moving forward by 4 years, the Chinese had their own AWACS flying in 2004. Another 6 years, the Chinese were exporting AWACS aircraft to Pakistan. From not having the technology in 2000 to becoming an exporter of the entire system in 2010. In another example, China has no aircraft carrier experience and was in discussion with Russia to import 50 x Su-33 for $2.5 billion, but the negotiations failed in 2009 and China had domestically made J-15 flying off a carrier in 2012.

Considering America's vast investment during the Cold War, it'd be silly to think that the Chinese military could somehow match the US in force projection. However, in terms of military technology, the Chinese today are on par in many areas with the US during Desert Storm (1st Gulf War). Having the technology does not mean that it's produced beyond LRIP (low rate initial production) as the Chinese military buys just enough to replace aging/retiring hardware and keeping its defense industry going.

To cite another example, China's UAV industry products is not up to par with MQ-9 Reaper, but can build and sell comparable products to the MQ-1 Predator at less than 1/4th of the cost today. As a matter of fact they already have a few customers, and the global UAV market over the next decade as been estimated at upwards of $89 billion. The US enjoys a technology edge and capability over the Chinese, but this lead must be actively maintained, or else the Chinese will catch up quickly.

[publicduende]

I don't think Xiongmao is wrong when he says China doesn't have any friends. China has a lot of business partners and client states (Myanmar, North Korea, etc..) but it has no true ideological or cultural allies. If let's say Britain were to enter a war there are plenty of anglophone countries who would join on Britain's side simply out of ideological, political, and cultural reasons. Even when most of the world despised the U.S. entering into Vietnam or the Iraq war you had plenty of anglophone countries who secretly supported or even sent troops. An example would be Australians who participated in the Vietnam war.


China in this regard is very isolated. You wouldn't see majority ethnic Chinese countries like Singapore or Taiwan joining China in their wars anytime soon.

I disagree. When geopolitical balances are at stake, alliances and "friendships" are formed almost on the spot. China would quickly form a block including Russia, some decent Islamic military powers - Iran and Pakistan and perhaos even that Nato freelancer, Turkey - perhaps even India. Instead of asserting how isolated China is, one should really ponder on how quickly the US of A are falling out of love with key allies in Europe and Asia. A few more shit moves from Obummer and they will only have Israel to count on.

[publicduende]

China does not have strong ideological & military alliances abroad today because the PRC government had mostly chosen to "opt out" of the Cold War. While the USSR and Warsaw Pact alliances fell apart, NATO is still around. Things are slowly changing with SCO, BRIC, etc. as some old border disputes are resolved and member states dip their toes with limited military exercises ("anti-terrorism drills"). But the legacy of China's preference for not getting into military alliances remains.

In terms of military, those who want to match China's military capability directly versus the US today, or are dismissive of China's military advances do not really understand where China's strengths are. Back in 2000, China's military was perhaps the world's largest open-air museum, with the Chinese military trying to buy military hardware from abroad to modernize its forces. The Chinese Air Force did not have AWACS system (Airborne Warning and Control System) and tried to purchase from Israel for $1 billion, which the US blocked in 2000.

Moving forward by 4 years, the Chinese had their own AWACS flying in 2004. Another 6 years, the Chinese were exporting AWACS aircraft to Pakistan. From not having the technology in 2000 to becoming an exporter of the entire system in 2010.

Considering America's vast investment during the Cold War, it'd be silly to think that the Chinese military could somehow match the US in force projection. However, in terms of military technology, the Chinese today are on par in many areas with the US during Desert Storm (1st Gulf War). Having the technology does not mean that it's produced beyond LRIP (low rate initial production) as the Chinese military buys just enough to replace aging/retiring hardware and keeping its defense industry going.

To cite another example, China's UAV industry products is not up to par with MQ-9 Reaper, but can build and sell comparable products to the MQ-1 Predator at less than 1/4th of the cost today. As a matter of fact they already have a few customers, and the global UAV market over the next decade as been estimated at upwards of $89 billion. The US enjoys a technology edge and capability over the Chinese, but this lead must be actively maintained, or else the Chinese will catch up quickly.

Well put.

Not to mention how much military grade technology has key components produced by the likes of Huawei or Foxconn. Perhaps it's still all in the realm of conspiracy theories, but in a confrontation with China I really wouldn't want sensitive parts of my technology arsenal to be provided by the enemy...

[momopi]

Well put.
Not to mention how much military grade technology has key components produced by the likes of Huawei or Foxconn. Perhaps it's still all in the realm of conspiracy theories, but in a confrontation with China I really wouldn't want sensitive parts of my technology arsenal to be provided by the enemy...

The Chinese side has already labelled US made network equipment as "terrible security threat":
http://www.ibtimes.com/cisco-faces-chal ... asons-wake

[Jester]

The Chinese side has already labelled US made network equipment as "terrible security threat":
http://www.ibtimes.com/cisco-faces-chal ... asons-wake

I would love to see them develop alternatives to U.S. hardware and software -- and export them to third countries.

[Repatriate]

I don't think Xiongmao is wrong when he says China doesn't have any friends. China has a lot of business partners and client states (Myanmar, North Korea, etc..) but it has no true ideological or cultural allies. If let's say Britain were to enter a war there are plenty of anglophone countries who would join on Britain's side simply out of ideological, political, and cultural reasons. Even when most of the world despised the U.S. entering into Vietnam or the Iraq war you had plenty of anglophone countries who secretly supported or even sent troops. An example would be Australians who participated in the Vietnam war.


China in this regard is very isolated. You wouldn't see majority ethnic Chinese countries like Singapore or Taiwan joining China in their wars anytime soon.

I disagree. When geopolitical balances are at stake, alliances and "friendships" are formed almost on the spot. China would quickly form a block including Russia, some decent Islamic military powers - Iran and Pakistan and perhaos even that Nato freelancer, Turkey - perhaps even India. Instead of asserting how isolated China is, one should really ponder on how quickly the US of A are falling out of love with key allies in Europe and Asia. A few more shit moves from Obummer and they will only have Israel to count on.

Iran is a paper tiger and they are playing their own games. Pakistan is untrustworthy to any ally that isn't also a hardcore islamic fundamentalist at its root. These are all fairweather friends of convenience and business partners. They are no ideological allies in any shape or fashion. China and Iran have a love relationship because China loves oil and Iran is heavily embargoed by the western world.

Anglophone countries are a pretty unified front in many ways. Recent modern history hasn't done anything to dispel that notion. I don't care for the anglo world all that much but it's just a fact of how things operate.

[Winston]

It's funny you mentioned this topic. I was going to post this documentary about China called "How China Fooled the World" but I wasn't sure which thread to do it in. This looks like the most suitable one. I hope posting this documentary doesn't get this site blocked from China through their "Golden Shield Project". lol

How China Fooled the World (full documentary)

Description:

China is now the second largest economy in the world and for the last 30 years China's economy has been growing at an astonishing rate. While Britain has been in the grip of the worst recession in a generation, China's economic miracle has wowed the world.

It is a story of spending and investment on a scale never seen before in human history -- 30 new airports, 26,000 miles of motorways and a new skyscraper every five days have been built in China in the last five years. But, in a situation eerily reminiscent of what has happened in the west, the vast majority of it has been built on credit.

This has now left the Chinese economy with huge debts and questions over whether much of the money can ever be paid back. Interviewing key players including the former American treasury secretary Henry Paulson, Lord Adair Turner, former chairman of the FSA, and Charlene Chu, a leading Chinese banking analyst, Robert Peston reveals how China's extraordinary spending has left the country with levels of debt that many believe can only end in an economic crash with untold consequences for us all.

[Luc Furr]

I say total collapse of the entire world. A worldwide darkage. Darkages have happened before but this time it will be a little different because this time the darkage will not end. The end of everything.

[Moretorque]

OK so I don't know about countries, but I have a long history of my employers imploding just after I leave them!

I've been hearing a lot of rumours about China recently, and the stock market speaks for itself (now down 20% - official bear market territory).

So did I get the hell out just in time?

In Guangzhou there was rampant building of shopping malls and apartment blocks. Most were occupied. But then this is probably China's most booming city, and housing is hard to come by.

But in lesser cities I visited there was rampant over-building. It was most noticeable in and around Zhuhai.

I also saw bubble evidence: a few half-empty shopping malls in less desirable areas, an abandoned skating rink at the top of a Guangzhou shopping mall, and (most iconic of all?) an apparently closed down ferris wheel on the top of a Dongguan shopping mall. I guess that banks will have stumped up the cash for these follies.

Plus so much new stuff was falling apart - the stuff built for the 2010 Asian Games was just woeful.

Everyone is busy in China. But not much was getting done. Most of the stuff I bought for my apartment was just total junk. And it wasn't that cheap either.

Biggest red flag of all for me... I met a lady who owned an apartment and she was moving out because she couldn't afford to live there and pay the mortgage. This was a lady who hadn't even bought the place in the bubble years. It's difficult to see the Chinese consumer coming to the rescue - they don't have any money, or any free time in which to spend it.

If the Chinese economy does crash then trust me you wouldn't want to be in China. I saw enough to convince me that Chinese people can be very barbaric. Fighting to get on buses, no regard for animals, no regard for safety... yikes. Plus add on the government's love of blaming foreigners (Westerners in Beijing, Japan for anything else) and people who follow the official party line like sheep.

It could also go very badly wrong for China if a shooting war broke out. China has very few friends on the global stage. Aside from North Korea, maybe no friends at all. China takes a lot, but gives nothing. Japan and the USA have vastly superior technology. The Chinese can't even make a cheap kettle that doesn't scald your hand when the water boils. And China can't also feed itself, plus the food quality is absolute junk compared to Thailand. There is no way that China could manage a war and keep the lid on internal dissent.

Well let's see what happens...

Dude you don't get it, we are waiting for everybody to realize this con where the money system is not tied to something real is designed to cheat all the citizenry of the world out of the fruits of their labor and transfer all real wealth to the non producers at the top running this con.

The socialist are walking a fine line with their subjects {YOU} dancing this con between revolt, collapse and tenancy. The tenancy is failing and the system is falling into collapse and then you may see revolt. Most people are not sharp enough to figure the socially engineered con out.

It can be summed up in one sentence, DRUM ROLL PLEASE, here we go again sense people still don't get it.

THEY FIGURED OUT BY COUNTERFEITING THE MONEY AND NOT BEING AUDITED THEY COULD RULE THE WORLD.

[Anatol]

China does not have strong ideological & military alliances abroad today because the PRC government had mostly chosen to "opt out" of the Cold War. While the USSR and Warsaw Pact alliances fell apart, NATO is still around. Things are slowly changing with SCO, BRIC, etc. as some old border disputes are resolved and member states dip their toes with limited military exercises ("anti-terrorism drills"). But the legacy of China's preference for not getting into military alliances remains.

In terms of military, those who want to match China's military capability directly versus the US today, or are dismissive of China's military advances do not really understand where China's strengths are. Back in 2000, China's military was perhaps the world's largest open-air museum, with the Chinese military trying to buy military hardware from abroad to modernize its forces. The Chinese Air Force did not have AWACS system (Airborne Warning and Control System) and tried to purchase from Israel for $1 billion, which the US blocked in 2000.

Moving forward by 4 years, the Chinese had their own AWACS flying in 2004. Another 6 years, the Chinese were exporting AWACS aircraft to Pakistan. From not having the technology in 2000 to becoming an exporter of the entire system in 2010. In another example, China has no aircraft carrier experience and was in discussion with Russia to import 50 x Su-33 for $2.5 billion, but the negotiations failed in 2009 and China had domestically made J-15 flying off a carrier in 2012.

Considering America's vast investment during the Cold War, it'd be silly to think that the Chinese military could somehow match the US in force projection. However, in terms of military technology, the Chinese today are on par in many areas with the US during Desert Storm (1st Gulf War). Having the technology does not mean that it's produced beyond LRIP (low rate initial production) as the Chinese military buys just enough to replace aging/retiring hardware and keeping its defense industry going.

To cite another example, China's UAV industry products is not up to par with MQ-9 Reaper, but can build and sell comparable products to the MQ-1 Predator at less than 1/4th of the cost today. As a matter of fact they already have a few customers, and the global UAV market over the next decade as been estimated at upwards of $89 billion. The US enjoys a technology edge and capability over the Chinese, but this lead must be actively maintained, or else the Chinese will catch up quickly.

Hello,

Your analysis is terribly flawed. I am noticing this all over this forum. People just have no idea what they say!

Chinese technology is only about 10 years behind U.S.A.'s. In another 10 years, it will have caught up with U.S.A. In another 10 years, it will have over-taken U.S.A. The only thing China doesn't have at the moment is large numbers of production. It is wisely catching-up in technology first, then it will build in truly mass numbers.

However, it is all for naught, as the evil feminism and the evil p**-marital rel*tions have infested China. Along with this, fast-food is rife in China. China is on the very correct path technologically but totally on the wrong path culturally.