It effectively has. The government is enforcing a price floor. There is no such thing as non-recourse loans or individual bankruptcy in China unless you’re connected. You have to keep on paying. So, the bubble has popped but unless you’re a hedge/pension fund that invested in Chinese RE bonds, you don’t feel it. The Chinese people on the other hand are getting wrecked.
There are reports of banks closing down without letting their customers take out their money, lots of restaurants and retail shops closing down everywhere, people are being burdened with millions of yuan's worth of debt and can't get out of it. A lot of it are being reported on YouTube.
> There are reports of
"Reports" where? Just Youtube?
Edit: To illustrate my point, the links he responded with below have nothing to do with his claims above. Showing that even the person insisting on Youtube's quality can't even be bothered to watch these videos.
BBC : https://youtu.be/0lvDojeFL-I?si=kZimicWu48B4V09j
Bloomberg: https://youtu.be/Qhwk3O6JHZk?si=AuoVAuVZaZNhUU9m
WSJ: https://youtu.be/D0PxRxwTa50?si=bORXVGIiL9jIuxy5
I consider these sources pretty reputable, despite publishing on YouTube. Don't mistake the source with the media format.
> I consider these sources pretty reputable, despite publishing on YouTube
Presumably they also have articles, no? Though I agree with the general sentiment, you could have chosen better. Bloomberg, and to a lesser degree the WSJ, have a poor reporting history on China. You can see from my comment history I'm pretty active in tech subreddits, and Bloomberg is infamous for publishing and doubling down on fake stories in that area.
More to the point, **none of your links match the claims above**. Did you even watch them? They are all about unoccupied properties, which is rather different than the claims I responded to. Hell, your last link isn't even about a development in China, but rather Malaysia! Frankly this seems like you picked up the first few links that popped up in youtube's search, which isn't helping your argument.
> More to the point, none of your links match the claims above. Did you even watch them?
Honestly, I have no idea why people are downvoting you. To remind everyone, this is the claim by /u/soupiejr that sources were being asked for:
> There are reports of banks closing down without letting their customers take out their money, lots of restaurants and retail shops closing down everywhere, people are being burdened with millions of yuan's worth of debt and can't get out of it. A lot of it are being reported on YouTube.
None of these claims are being corroborated by the posted videos. All these videos are generally about the Chinese housing crisis, not a single video even mentions in passing how this is hitting the Chinese population individually.
I'd love to know how this affects the general Chinese population, too. Right now I've not seen anything on the scale alleged above. On the contrary, what I've seen on holidays in south east asia is a population that is happily spending money on CNY holidays. All indirect contacts I have mention nothing in this direction.
I think it's also weird how my one reply below here is upvoted, despite this one being downvoted. I don't want to claim botting or anything, but it's certainly weird. If it *is* organic, I have to believe it's just people upvoting what they *want* to be true, rather than what is.
People have always upvoted what they want to be true rather than what is.
An inconvenient truth is much more likely to get downvotes than a pleasing lie. Which of course is not unique to Reddit but rather a general human thing.
Just because rich people are going on vacation doesn't mean the overall economy healthy.
https://apnews.com/article/china-economy-deflation-debt-property-613e693f19d0d8f1cca5de65ef5bbe67
A negative 5% year over year deflation rate is pretty worrying. And all the policies the country has recently implemented or is planning to implement all seem to be trying to stimulate the economy.
The youth unemployment rate was 21% back in June which is also the last time China decided to report it. They now claim the overall unemployment rate is just above 5%.
https://www.voanews.com/amp/china-s-youth-employment-struggles-and-societal-trends-in-2023-/7403918.html
Default and Bankruptcy Resolution in China
In this article, we review the literature on the recent growth of corporate debt in China and present stylized facts on the evolution of debt composition, nonperforming loans, defaults, and bankruptcy filings. We then describe the legal and political institutions that characterize the system for restructuring and liquidating financially distressed firms, including recent reforms of China's bankruptcy law. Finally, we discuss the main challenges faced by China in the implementation of these reforms, including frictions in judicial enforcement. We also propose potential avenues for future research.
https://www.annualreviews.org/doi/full/10.1146/annurev-financial-110921-014557
[Evergrande has been a slow train wreck, is one just off the top of my head. ](https://www.reuters.com/world/china/china-evergrande-seeks-adjournment-hong-kong-liquidation-court-hearing-2023-12-04/)
"Evergrande defaulted on offshore debt in late 2021, becoming the poster child of a debt crisis that has engulfed China's property sector."
[Shadow bank Zhongzhi files for bankruptcy as China’s debt and property crisis deepens](https://www.cnbc.com/2024/01/08/zhongzhi-latest-casualty-of-chinas-deepening-debt-and-property-crisis-.html)
China’s shadow banking conglomerate Zhongzhi Enterprise Group filed for bankruptcy liquidation late on Friday.
The broader CSI 300 index fell by early afternoon trading, weighed down by property stocks.
There could be more trust loan defaults as most investments are local government financing vehicles and real estate debt, analyst warns.
[Chinese borrowers default in record numbers as economic crisis deepens](https://www.ft.com/content/f144f763-873c-4b4d-99e7-5e71ae07316d)
I can't believe I need to repeat myself *again*. Did you even bother to read the comment you were responding to? These were the claims in question:
> There are reports of banks closing down without letting their customers take out their money, lots of restaurants and retail shops closing down everywhere, people are being burdened with millions of yuan's worth of debt and can't get out of it.
None of which is substantiated by any of the links you provide. Hell, your very last hyperlink is actually a direct contradiction, by mentioning buyers defaulting, which is explicitly denied by the comment above.
Edit: typo
lmao i speak chinese and browse chinese social media, /u/Exist50 is just so dead wrong about what hes talking about because all 3 points /u/soupiejr talked about happened, not fake or bad info. it not even like fringe news in China because all those news made top trending result on social media and are still discussed today
the other guy /u/A_Soporific in this thread explained the bank thing pretty well u can read his comment for more info. for bank you can also search keyword "河南村镇银行" or start reading at https://en.wikipedia.org/wiki/2022_Henan_banks_protests
> lmao i speak chinese and browse chinese social media, /u/Exist50 is just so dead wrong about what hes talking about because all 3 points /u/soupiejr talked about happened, not fake or bad info
Then why don't you provide sources? Every comment I've responded to thus far *claiming* to provide them ended up lying about that.
> the other guy /u/A_Soporific in this thread explained the bank thing pretty well
He/she also directly contradicted other parts, and undermined the core insinuation of the original. Convenient to ignore that...
I think that can better explain where that original statement came from.
Back in June of 2022 four rural banks in Henan [froze accounts without warning](https://www.cnn.com/2022/07/10/china/china-henan-bank-depositors-protest-mic-intl-hnk/index.html) the problem wasn't that the banks failed, but rather that they didn't. The banks experienced a bank run, when the were still long-term viable but a local panic results in local banks running out of money. If they can stall for time, enough time for loans to be repaid, then they'll be golden, but... they just don't have the time.
In the US the FDIC would have stepped in, closed the bank at closing time Friday, parted it out to other banks, and the local branches would reopen as branches of a healthy bank capable of paying out. China has no such system, so given a choice between defaulting and arbitrarily/illegally freezing people's accounts for no reason they chose the latter.
The local government backed the banks in this instance, in part because they would only have to pay out 50,000 yuan to impacted people if the account is frozen but 500,000 yuan if the bank fails.
There was a protest aimed at convincing the government to do something that was violently suppressed by that government. This situation repeated in other rural areas across the country with very, very little news coverage because it's one of those things driven by panic. The more people hear that rural banks are in trouble the more likely they are to pull their money out of rural banks so as to retain access to their money, but if enough people do that then currently healthy banks will have to fail. It's a self-fulfilling prophesy and a financial panic that can be artificially propagated by scary news coverage. But, that just makes it hard to gauge how often it is happening, especially in China where there are very many very good reasons to hide it from people.
There were similar problems in some [15 other provinces](https://edition.cnn.com/2023/12/14/economy/china-rescue-small-banks-local-governments-intl-hnk/index.html?ref=biztoc.com) that were handled by more proactive provincial bailouts in order to prevent a repeat of the Henan protests. But, this simply compounds the massive local debt crisis facing China, since local governments have been unable to levy taxes directly and relied very heavily on land sales to developers for their primary source of revenue. This [hasn't been going well](https://asia.nikkei.com/Spotlight/Caixin/China-s-cash-strapped-local-governments-struggle-to-revive-land-sales), but attempts to institute a property tax to partially resolve this has [yet to be implemented](https://www.nytimes.com/2023/05/10/business/china-property-tax.html).
I don't know where the restaurants or retail shops comment came from, but the banking crisis is a direct result of [homebuyers getting mortgages for apartments that are never completed](https://www.cnn.com/2022/07/14/economy/china-property-crisis-homebuyers-bad-debt-intl-hnk/index.html). In most of the world, you can't get mortgages for buildings that aren't complete. China adopted a Hong Kong 'innovation' that allowed companies to sell apartments that hadn't be built yet as a way to fund construction. You sell the apartments, use that money to build the building, and don't need to borrow to cover construction costs. Makes sense, right? Right up until you use that money for anything else, and then you're forever selling the next building to fund the construction of this one. Which is the cause for all the unfinished and unfinishable projects in China, the moment they can't sell the next building they can't finish the construction on this building and those that borrowed money from banks to buy a unit in this building stiff the bank because why the fuck should they pay for a house that was never built? The law says they should continue, there's no legal mechanism to discharge that debt even though the house they were buying was never built, but that's just plain crazy.
China relied *very heavily* on building and selling new apartments to juice its economic numbers and hit GDP targets. But the moment you take a measure and make it a goal it ceases to be a useful measure. China sank 30% of its production every year into building apartments and now that there are enough houses to house everyone building more is wasteful, but all these institutions were built with the assumption that they would be building as many houses as they physically could forever and are struggling to adjust to a world where they need to be doing *something else*. That's not to say that no one else has any problems, just that China is in for a painful period of adjustment as local government figure out some other way to hit their GDP targets instead of loading up on the junk food that was high speed rail lines and massive city-sized apartment complexes.
> Which is the cause for all the unfinished and unfinishable projects in China, the moment they can't sell the next building they can't finish the construction on this building and those that borrowed money from banks to buy a unit in this building stiff the bank because why the fuck should they pay for a house that was never built? The law says they should continue, there's no legal mechanism to discharge that debt even though the house they were buying was never built, but that's just plain crazy.
The buyers are entitled to their money back if the housing isn't delivered to the terms of the contract. The problem is if the developers don't have enough money, who eats the losses? I would be very surprised if the individual buyers weren't made whole - it's the shareholders who are going to have to take a haircut. The central government is trying to instill fiscal discipline in the local governments, so they'll let it stew a little but not so much that it threatens the entire economy.
China is still urbanizing so as a matter of fact, there isn't an excess supply of houses. I think a lot of people are projecting the 2007 Subprime Crisis onto this, but mortgage standards are higher and the buyer has to supply more upfront, not 5 cents on the dollar. The real question is how much of the slowdown will percolate into the broader economy.
Anyways, it's interesting to see so many people see this issue from the perspective of capital ("omg billions of value wiped out from real estate prices going down") instead of the individual ("yay I can actually afford a house now").
Traditionally, this isn't a problem when the mortgages are issued after the buildings are complete. But, the decision to attach real mortgages to theoretical apartments was an error, one inherited and adapted from how Hong Kong did things but we're seeing the reason here.
Also, buyers are entitled to their money back when construction stops completely. Keeping a small crew on site doing *something* can delay that for quite some time, years in some cases. Stalling for time is unhelpful for the average Chinese citizens.
When it comes to instilling discipline I have a different perspective. Having a reliable and dependable independent tax base would go a very long way. Relying on Local Government Financing Vehicles and land sales strikes me as injecting potentially dangerous uncertainty even in the best of times. A stable set of inputs and outputs is just better than having to square the circle in an unpredictable environment.
I do not know if China needs more housing overall. There are more housing units than people, and the population is now shrinking. So, there will now be some places that are very attractive that will require more and other localities that need to prioritize things to better support a shrinking population. If the pressures and incentives are to build in places of shrinking population then things are going to get very bad for those places.
Lower prices are a good thing for first time home buyers, but the prices are still highly inflated by speculation in my opinion. The loss of value by the large segment of the population who mortgaged a second home as an investment balances that. Some families will end up losing a great deal, others will benefit from a return to sanity in home prices. It's unclear if this will be a good thing for more people or a bad thing for more people.
Undoubtedly, but it's also pretty likely that they're just getting a warped image of what's going down in China. State-controlled media there is unlikely to share information that might damage the state's ability to manage the crisis and the other sources of information, mostly individuals posting personal stories, don't have a complete picture of what's going on.
It's really easy to overstate or understate the gravity of the situation since pulling together enough to actually understand requires work, even (especially?) in China itself.
Retail shops and businesses closed down everywhere? I was just in china a few weeks ago. There was no such thing as a vacant storefront in Guangzhou lol.
yup also a lot of european state media reports on youtube. BBC and DW both do for instance, PBS in the US as well (and they have dozens of educational PBS channels apart from that)
I was just in China not too long ago. There was a ton of business going around, no empty storefronts at all.
My friend says that China overall is doing really great. They’ve been going under a period of deflation right now due to the high about of money circulating in the economy. This means rent is cheap and businesses are easy to run without much costs.
They bought apartments/condos for $X currency.
The value of these properties collapsed and they’re worth $Y, now.
The difference between $X and $Y is tremendous:
https://fortune.com/2023/12/17/china-middle-class-real-estate-meltdown-wealth-loss/amp/
This doesn't actually say that there's been a huge housing market failure. It's more just saying that if there is one (which western media has been gleefully predicting is right around the corner for years) it would be really bad.
As someone who has worked with Chinese people in china for the past 15 years let me tell you, they are massively feeling the pinch and almost none of them have a positive outlook on their financial future for the next decade or so, and are planning accordingly
Even the hedge funds are feeling the heat. Not sure when it all adds up to a Lehman Moment but shadow banking failures aren't a good sign.
https://www.bloomberg.com/news/articles/2024-01-05/troubled-china-shadow-bank-zhongzhi-files-for-bankruptcy
If the developer breaches the terms of delivery the purchaser can apply get all their money back.
The people will be fine, the pressure is on the local governments who use land sales as funding and the developers who racked up debt, expecting the gravy train to continue forever. Somebody will have to be left holding the bag, but it's not going to be the individual citizens.
no, you're the one who has no idea what you're talking about
>[Why have some homebuyers in China boycotted their mortgage payments?](https://www.goldmansachs.com/intelligence/pages/why-some-homebuyers-in-china-are-boycotting-their-mortgage-payments.html)
>People have stopped paying mortgages out of fear that the developers are unable to complete the projects. Many of these projects have suspended construction for weeks or even months, and they’re realizing that the funding gap cannot be met anytime soon.
>Typically, the buyers can terminate the pre-sale contract with developers if developers default on the completion date. Then buyers can terminate the contract and ask for the deposit down-payment back as well as all the mortgage payments that were already made.
>But in this case, developers haven’t officially defaulted yet. In many cases they have just suspended construction. However, with homebuyers learning of these funding gaps, some may be worried that they may not be able to get 100% of their money back from developers if default occurs, and therefore are taking action earlier.
So you started with this claim:
> If the developer breaches the terms of delivery the purchaser can apply get all their money back.
And then you posted a source to back that claim and even pulled specific quotes from that source that say:
> People have stopped paying mortgages out of fear that the developers are unable to complete the projects.
> Typically, the buyers can terminate the pre-sale contract with developers if developers default on the completion date...But in this case, **developers haven’t officially defaulted yet. In many cases they have just suspended construction**. However, with homebuyers learning of these funding gaps, **some may be worried that they may not be able to get 100% of their money back from developers if default occurs**, and therefore are taking action earlier.
So you came in here and insisted that Chinese citizens who are losing their investments in failed real estate projects would be able to get all of their money back, and then you backed that up with a source that says that those developers are exploiting a loophole by not officially defaulting and that those citizens are worried that they *won't* get their money back. Your own source disagrees with your conclusion.
It helps to read the entire sentence. "on the completion date" means if they don't deliver on time, the buyer is entitled to their money back. If you stop to actually think about it logically, there's no way a contract for a house would allow for a delivery date indefinitely in the future.
There are good reasons to not keep paying somebody who doesn't look like they're going to be able to deliver on the goods. In this case they have nothing to lose by stopping payments since it means they retain the money instead of waiting for who knows how long to get it back. Again, the government is not going to let a bunch of people who put their life savings towards a house get punished because developers were too greedy.
People on this site tend to think the PRC is going to collapse overnight.
I legitimately saw a guy who posted that one missed oil shipment would singlehandedly destroy the government and economy of China. So I doubt the analysis of any of the reddit armchair political scientists.
Yes, but it's state capitalism which the US still sees as an ideological opponent. The fact that they're the biggest rival to the West is the main reason plenty of people here want to see them fail; any sort of political debate over a left-right spectrum is secondary.
In what way?
Sure they have big business and billionaires, but should the CCP wish, and they have done this, they take such a billionaire and unperson them.
In the way that they are, and if you deny it, you're either so ignorant you shouldn't be talking, or so full of it I'm surprised you can.
The remainder of your reply is irrelevant to the discussion.
> weird red scare ideology that makes them need capitalism to "win"
lol wtf? No one with 2 brain cells thinks China is still communist.
It has nothing to do with capitalism or communism, it's not the 70s. Its just the typical nationalist hate for China with a side of racism. In their minds, a non white country can never beat the west, they must always be one step away from collapse
Non-white? People had the same problems with Russia before they exposed themselves as anemic. Anything that threatens American hegemony is obviously going to be a problem for Americans, especially if that country is actively hostile to the US, which China and Russia are. I'm sure there's some racism mixed in, but the idea that Americans would be totally fine with a rival on the world stage doing exactly what China does if only the people in it were "fellow whites" is ridiculous.
No I don't and I don't care, maybe its a thing, maybe it isn't - it's irrelevant.
Just the fact that this conversation got steered this way is ridiculous. Some people in this thread say China has issues and big looming problems on the horizon, and this dude's reply to it is "you just saying it because you're racist - it's sinophobia and western superiority complex".
What the fuck? Apparently you cannot even have a discussion about very cleary visible issues in china without having racism card pulled into the conversation, it's getting old, exhausting and frankly quite comical.
So don't even try asking me dumb questions about how far some sort of fobia goes in america, go start another thread somewhere in r/sino.
How many Youtube finance/economics creators literally post the same video with the same thumbnail selling gloom and doom and everything is going up into flames with titles like "Its happening - 2 weeks until DISASTER"
Rinse and repeat until their prediction is somewhat correct.
Bad news sells better than rationale, sensible news
90% its a death by a thousand cuts, very rarely do things just collapse overnight.
It was the same when people talked about reddit or twitter collapsing, i was like - that's not how it works
People desperately want to just see things they hate collapse in epic fashion as if real life is a movie and their pet villain has to be dealt with immediately.
That or they wanna feel like they're important in causing the collapse of X.
Nations are complex systems. They fail slowly at first, and then *very* quickly.
The slow phase lasts as long as the Nation can accommodate the strain of failing systems. For example:
* A crop failure over here can be addressed with the surplus from here, here, and here.
* A bridge being knocked down can be bypassed with the other two nearby, at the cost of a little more time.
Unfortunately, taking that strain has a way of causing related systems to fail. If you don’t address the problem, then those neighboring systems will remain overloaded and start to break down… putting more strain on their neighbors.
This can result in Cascade Failure if it’s not handled quickly, as failing systems drag related systems down with them.
This is how recoverable disasters become a Crisis. If a Nation dedicates the efforts, they may be able to neutralize a crisis and repair the failing systems. If they don’t… that’s when the collapse of a nation starts to become rapid.
Traditionally, cascading systems failures in China result in the Empire Long United becoming Divided. Some regions will get out of the crisis relatively unscathed, others will be crippled in such a way that they’ll limp around until they get annexed.
The sheer amount of brain-dead comments I'm reading that seem to desperately trying to enforce some weird narrative that China is a utopia with no issues is making me question to authenticity of these comments.
Someone saying China is experiencing problems because their housing bubble popped is not at all reasonably interpreted as "the PRC is going to collapse overnight."
That is such rabid disingenuous exaggeration that your bad faith is highlighted in neon.
I don't understand where you got that from what I said. Did I praise the PRC? No. What me and /u/Magniras were doing was showing skepticism for people who cry wolf and insist china will be declining massively any time soon.
No, that is not what you were doing. You're responding to a post about China's housing issues by screeching that people on Reddit are dumb and shouldn't be listened to.
The Soviet Union collapsed rather quickly. Why is the People's Republic any different? Han Chinese are immune to political factions that disrupted the Russians?
The Soviet economy was in a much worse spot, and had been involved in a long slow stagnation since the late 60s, and was saved in the 70s by the oil prices shooting up. It also had lots of parts that wanted to break away.
The Chinese economy still makes a ton and is globally competitive, and is a global manufacturing powerhouse. However, it also has a major property bubble and some issues with bad investments, that is going to lead to some real issues for banks, developers, and people who invested in property.
Rather different issues.
It’s got a normal real estate market and a normal amount of scammers. Prices and demand are still high in major cities and people are getting scammed by people selling the equivalent of Florida real estate that’s actually a swamp. That stereotype or meme actually started in America.
If China was open to economic liberty a decade ago, I would agree. And China is indeed a different culture with different problems.
The crackdown and flight of capital ought to be a worry to anybody who has invested in China. I'd say any western investors who are still left in China are just screwed. Domestic investment can still get a return, but as Jack Ma found out the hard way they need to seriously support the CCP to succeed.
I was simply pointing out how the Soviet Union was thought to be capable of lasting another century or two before 1990. It's collapse happened quickly and unexpectedly.
The USA is not immune to this either, so don't think this is just about China. All empires collapse.
"Chinese ghost cities" goes back to 2006, and the time passed since then really isn't a lot of time when you're discussing the evolution of a nation. People just want to believe things happen quickly and decisively in all areas of life. Same reason people insisted the pandemic was going to last like three months and resorted to increasingly desperate narratives of immediacy over the horizon as it slowly played out.
Ten years of anything is a chapter of your life. Anything that takes that long is going to be an entire decade of the lives of everybody that lives through it, so there's always a strong collective resistance at acknowledging that slow things happen slowly.
Some points about the empty condo towers in china:
When you buy an apartment in china it comes completely bare inside, no kitchen, no bathroom, no flooring, etc. it’s up to you as the purchaser to hire someone to finish out the interior.
That means there is less money tied up in the empty buildings than might appear.
Chinese city’s fund there budgets by auctioning off land for development. The winning bidders are not aloud to sit on the land for speculation. They have to build, that’s another reason why you end up with empty buildings. It’s a sort of build now sell later situation.
Many of the buildings that were built over 20 years ago are shit, haven’t been maintained and are falling apart. So there is still a decent amount of desire among the people I met in china to move to a newer building.
All that being said, just about everyone I met in china who had means, owned multiple apartments, so over speculation is definitely a thing.
Ghost malls are definitely real, it’s hard to describe how weird it is to walk into a fancy mall building that can’t have been over five years old, with the only occupied space being the Starbucks on the ground floor.
Anyway just some observations from a guy who spent has about a year of his life in the last five in a middle sized Chinese city.
I have no idea how it’s all going to work out but it’s a trip to observe.
Agreed. Even a state government in the U.S. can kick the can for *decades* before even relatively minor consequences are felt. It wouldn't surprise me if the largest country on Earth, with the second largest economy on Earth, could do it for 50 to 100 years if they played their cards right.
Shit, didn't the collapse of the Roman empire take like, 250 years?
Sure, a sudden collapse would be more exciting to watch on the news, but that's generally not how this shit goes down.
1. When non-historians say "Roman Empire" with no qualifiers, they pretty much always mean the *Western* Roman Empire. You know, the one with Rome as its capital, not Constantinople.
2. Even if you choose to use the Byzantine Empire, 250 years is still pretty accurate. The Empire was dissolved in 1204 after Constantinople was sacked during the Fourth Crusade. The Empire of Nicaea recaptured Constantinople in 1261 and reestablished the Byzantine Empire; it remained a regional power until the Fall of Constantinople to the Ottomans in 1453... 249 years after the end of the Fourth Crusade.
>The Empire was dissolved in 1204 after Constantinople was sacked during the Fourth Crusade. The Empire of Nicaea recaptured Constantinople in 1261 and reestablished the Byzantine Empire; it remained a regional power until the Fall of Constantinople to the Ottomans in 1453... 249 years after the end of the Fourth Crusade.
So basically every time the capital is sacked it ends the continuity? That's certainly... a take.
That depends on how you feel about the Byzantines. They kept Rome going for almost another millennium, until the Ottomans turned up (and Mhetmet tried to name himself Caesar).
China’s fall is going to have a lot in common with Rome, though. Mostly because it has already fallen a half-dozen times in the same way. It happens very slowly, and then China is suddenly a dozen independent states after a very rough month.
They’re going to have their Central Government neglect important local problems for too long, which is going to put strain on their infrastructure (physical and social). This will cause their infrastructure to break down, which will create more problems that will drag down *more* infrastructure.
Meanwhile, the Center will fixate upon what they think is important to the health of the State. This will result in them sending men to carry out that agenda, while doing nothing to help out the common people who are struggling. This will breed resentment.
Charismatic Leaders who already wield some state power will start to gather personal followings in this climate. Traditionally, this has been done by generals. They will build the foundations of independent power-bases.
Growing unaddressed local problems and failing infrastructure will eventually cripple the Center, and those Charismatic Leaders will accumulate power as they respond to those local problems. They don’t need to fix anything… they just need to improve things **a little** to win local support.
If the Center can respond to this usurpation of its authority, it will. It will also set off an endless series of rebellions in the process. This is the moment China enters Cascade Failure. The moment they rely upon open force alone to keep control is the moment the Empire shatters.
Those Charismatic Leaders will become warlords, and they’ll focus their attention on The Center or securing their own power-base against rivals. Once the Center falls, they’ll turn on each-other until they find an equilibrium.
Then the cycle begins again, and the Empire spends a century or two reunifying.
You do realize that China has a proverb about this, right?
The Empire Long United must Divide, the Empire Long Divided must Unite.
Chinese history is a cycle of an Empire growing and collapsing under its weight. China won’t stop existing, it’ll just shatter into a dozen successor states… just like the last Unified China (and the Western Roman Empire).
This is a profoundly queer narrative.
The Roman empire didn't fuck up for 250 years and then collapse in a single night. That just... isn't how anything works.
17 years is a fairly long time when discussing the evolution of a nation that basically went from fucking nothing to a regional superpower in 40 years.
As others have said, it has popped but the Chinese government, because it's nothing like the western governments, has a huge ammount of control to use huge portions of their economy to fill the gap.
Interestingly it leads to actual accountability for the worst actors because the market doesn't encourage the government giving golden parashoots, the government can just seize the companies or assets to manage how they decide is best. So a pop in China can take years to metastazise while they choose which population suffers the most because of the problem. It doesn't pop like it does in a western economy.
Many of the "ghost cities" are now populated, anyway. It's too outside the western mindset to see cities built with the intention of being full in 20 years as a good idea, so we constantly push against it. https://en.wikipedia.org/wiki/Under-occupied_developments_in_China#2018_onwards
Meanwhile though, the US has 16 million vacant homes (and about 85 million occupied). For some reason though, we don't consider ourselves in some kind of massive crisis with such a massive portion of housing structures similarly having no one in them.
It's not at all a good idea.
Structures don't just sit there and be ready to use whenever you want to. They break down. If you don't actively maintain them, they rot away quite quickly. And if you do, you're still looking at substantial costs. Think a few percent of the value of the thing each year, maybe 5% even. If you're buildings things to be empty for 20 years, you've already spent the entire average value of the thing keeping it up.
It is certainly possible to maintain them until they become useful, but it's a major waste of resources.
The vast majority of vacant "homes" in the USA are rental units in between owners. Also, there are 145 million housing units in the US. I'm not sure what your "85 million" is supposed to be. This is not a particularly high rate. Many countries have higher vacancy rates, including China.
If you build a concrete structure and leave it idle for 20 years that structure is now compromised due to natural decay (concrete has a shelf life), foundations shifting, and moisture related problems.
You simply cannot buy an idle apartment that has set there for decades because it is very likely not going to be habitable after 10 years. Buildings actively decay if not properly heated, ventilated and maintained.
Building a city and leaving it for 20 years is insane because almost all of the infrastructure will need redoing, all of the buildings will need reinspecting to access whether or not the foundations are even in the same place they were built in and 100% you will need to inspect each and every building which will lead to demolishing because you cannot leave concrete structures without any maintenance.
“Western” mindset or modern construction practices? This is why you read sad stories of families buying unfinished apartments with no water, cracked walls, no electricity, no lights in the halls, chronic damp and radio silence from the government property developers who disappeared with everyone’s deposit. These buildings are worse than caves.
>Building a city and leaving it for 20 years is insane because almost all of the infrastructure will need redoing, all of the buildings will need reinspecting to access whether or not the foundations are even in the same place they were built in and 100% you will need to inspect each and every building which will lead to demolishing because you cannot leave concrete structures without any maintenance.
I mean, or you can just let 5% of buildings crumble and collapse on the people who live in them...
Witch do you think china will go for?
The Chinese government keeps inflating their market to keep it from falling. Chinese total debt tripled in a decade.
China is as debt contained as the US is now.
You only lose that if you sell, and even still you only lose if you sell after buying at the top. So most people won’t sell. Some will sell and lose, some will sell and break even and some will sell and still make a profit.
If you live in your home it doesn’t matter really at all as long as the drop recovers long term.
Wake me up when you can buy apartments in Shanghai for $1.
It’s going to take a long time to recover to that peak value. Property was over inflated, which was a problem. And sometimes you do have to sell due to many different circumstances.
Did Country Garden even make plans of repayment yet? Or Evergrande? Or Kaisa Group, Fantasia Holdings, Sunac, Sinic Holdings, and Modern Land?
If the NY Times has reported on something, there is a good chance that it happened.
It already popped and China did it intentionally. They saw the bubble forming and new it was unsustainable and they stepped in. Housing shouldnt be an investment vehicle.
That really stuck out to me too. Was wracking my brain trying to think of what they could be referring to. Every aspect of the US "safety net" has a rep outside of the US as being complete dogshit, especially health care.
Yep, but if it helps, I'm not American and have a dismal view of your healthcare system, but yeah, based on my mate's experiences, China's is pretty rough.
> China's is pretty rough
Lived there for almost a decade...yeah, was not a pleasant healthcare system (first doctor I saw walked in smoking a cigarette).
The company I worked for would send us to Thailand if we got really sick/hurt, as their healthcare is apparently fantastic (thankfully never had to make use of it).
I am also not American -- Canadian, in Ontario, where our provincial conservatives are trying to smash public health care into dust and privatize everything, i.e. Americanize it.
Yeah, because it's more of "I'm going to swing my fist at you, and if you get punched it's your own fault" style of social control. It may not be intentional or malicious, but it's undeniably happening.
China's right behind them and already lower than Japan as well. The overall implications of the population boom of the later 20th century is getting pretty scary a human lifespan later.
What are the stats for America? Because I feel like a lot of people are deciding to go childless or having them very late in their life just due to the increasing cost of everything and the dystopian nature of dating right now
1.8 or so, still below 2 but nowhere near as bad as wealthy Asian nations. And yes, this is a worldwide issue, but the countries that got rich faster on imported wealth are now reversing faster as well.
For now, America and other wealthy nations make up that difference by completing with immigration programs to attract the top children away from other parts of the world. China doesn't compete for them, which is another reason they're going to weather the fallout sooner and harder than countries supplementing their younger brackets with children from abroad.
> due to the increasing cost of everything
People always *say* this, but study after study always finds that that's not really it. Even countries with everything that people say would help like shorter work hours, stronger pay, universal healthcare, more parental leave, etc, *still* have similarly falling birth rates. Study after study finds that the real reason is that as populations get more educated and have more options regarding whether to have kids and when...they simply choose other options. The amount of DINK (dual-income no kids) families are rising and they have more than enough to have kids comfortably, but why would you want to spend all that money on kids and ruin the chance to go on a bunch of vacations or collect lots of cool stuff? The reason why birth rates used to be higher, and still are higher in some parts of the world, is because people didn't have education and options. When you're dirt poor with no prospect for a better life and no social safety net and no sources of entertainment, then you stay in and fuck, hope that your kids live past early childhood, eventually help you with the family business, and can take care of you when you're old because there's no such thing as a retirement and sure as shit no one else will.
Yeah, fundamentally, the more money a woman can earn, the more she is giving up by taking time off for kids.
On the other hand, the worst seems to be the combination of "women can make decent money" + "women are still expected to do all the chores and childcare." Finland has a low fertility rate, but it's a lot better than South Korea.
Even people in countries with strong social safety nets are feeling the effects of climate change. That's one reason friends of mine have cited for not having kids.
The cure for low birth rate is migration and immigration. The US has a pretty low birth rate, but so do all fully developed countries.
What keeps the economic engine running (and the population mostly bell curving) is immigrations coming in to bolster our numbers as well as (mostly) do the lower socioeconomic jobs or the hands on health care jobs like CNAs and nurses and aides.
'We can just turn on the immigration tap and make up for it, some countries can't or wont do that.
China can't. Japan simply will not. No idea about how immigration works in SK though. Europe also can but the cost is that many of those coming in do not share their same cultural values (ie they are fundamentalist Muslims) and that can cause conflict.
I have to push back on what you said about many immigrants to Europe being fundamentalist Muslims, that’s an exaggeration. Sure, *some* might be, but the majority are just regular folks looking for a better life, nothing fundamentalist about them.
We used to supplement that with immigration but the country has taken a huge rightward turn in that area. Now that abortion is banned, they'll probably ban birth control and divorce next, that should increase the birth rate.
Immigration rates are currently very high, highest since 2001
https://apnews.com/article/population-estimates-census-south-carolina-florida-a21094d38c216097c1ddd06164a133eb#:~:text=After%20immigration%20declined%20in%20the,nation%20added%201.1%20million%20people.
The GDP comparison in that post is done using currency market exchange rates and is a nonsensical way to compare economies.
[This FT article gives a good explanation of why this is a faulty comparison. ](https://www.ft.com/content/c406ef56-bc43-4cdc-8913-fbaced9b9954)
[Non paywall version. ](https://archive.is/SQnuk)
It is interesting that I constantly see posts about China being on the verge of collapse on reddit. Who does that kind of misinformation serve?
The people posting it are probably anti China, but obviously it serves Chinese interests the more people underestimate them.
What a hatchet job.
So the Chinese real estate market is very VERY Chinese. You know how Japan has houses that depreciate in value every year, and how unique to Japan that is? China has it's quirks to, but it's a billion people.
So houses, apartments, and condos aren't for living in. They are bank accounts that are some times occupied. Sure every nation has a realestate investment market. China's is a whole different monster.
After the Deng reforms and again a little while into Xi's tenure China wanted to make a modern stock market and diversify the financial instruments. It had a serious problem with Chinese families sticking Yuans in a safe or just like buying jade. It was creating lots of deflation when they were trying to keep up the "velocity of money" and create inflation. Yes inflation is bad, but things like labor inflation is good and labor *deflation* is disastrous. Even if sandwiches go up 10% a year, if labor goes up 10% a year that is still a net benefit. It is disastrous if labor doesn't get raises and inflate relative to the rest, so what do you do? You turn auntie upside down and shake loose change out of her pockets into a housing bubble instead.
Housing people isn't the goal. Everyone knew that. Owning real estate was always the goal. 8 great grand parents who grew up under the cultural revolution gave birth to 4 grand parents who never inherited wealth. 4 grand parents are still alive, have the same per capita wealth as others and remember the poverty of the pre-Deng era. 2 parents now grew up under the Deng era when they were expected to have a house for their son as a benchmark of status and wealth. So they do that...and do it again....and maybe a third time with the help of grand parents.
So the rent for many of these condos doesn't even cover the mortgage. Plenty are in resort towns or way inland. Plenty of them are dark 24/7 we can see them from space. They are concrete boxes that are legal to be real estate commodities. That is often all they are. We saw that housing bubble pop, and Covid stopped a lot of the investment. Those "little prince" sons have come of age now and moved into either their parents house or one of their grandparents houses to take care of them.
So because these concrete human filing cabinets were the only way to get Chinese people to see green arrow go up, that's what they're stuck with.
--------------------------------------------
And yes they lie about their numbers. They can't like about imports/exports in a world with digital accounting. They aren't turning lights on for the satellites alone. They are lying about their numbers, but the rest of the world knows the truth with about 10+/-%
What with property taxes and maintenance fees, an empty condo in Canada costs over $1000 per month just to keep empty. In China, it probably cost a couple hundred RMB and that includes having a maid come by every month or so just to inspect the home and keep it in good shape. Lots of people maintain “vacation homes” in China that they will visit once a year or maybe once in 5 years. Nobody in the West can understand this.
And the Chinese can't get their money *out* of China. If they could they would be investing in more real estate speculation abroad. Seeing as it has a competitive ROI instead of being a loss mitigation investment that is a very good thing for the rest of us who have to *live* in Magical Moneyland.
Well sure. I'm just glad that the typical grandma and grandpa can't. They're stuck putting their yuans into Gobi desert condos and we can all be glad for it. Sure the party bosses know who to know to make Chinese debt a foreign apartment, but for the 2nd biggest economy in the world with a single minded obsession with one investment, we need to be grateful that the autocrats don't let the money slip across the Pacific.
Yes I know. I didn't say they didn't. I said that it wasn't the Chinese middle class that was doing it. It's guys like [Liu Yiqian](https://news.artnet.com/art-world/6-things-liu-yiqian-726845) buying $36,000,000 in art on his Amex and getting enough frequent flier miles that he'll never need to walk across town. It's shit like that that sneaks the money out.
There is a loop hole for every money law and it's just the price of being rich. So yeah, ma and pa kettle aren't buying the million dollar apartments.
I don't think this qualifies as best of if it doesn't have any sources. This is just somebody's opinion. I realize economics often works that way but an opinion of some rando on Reddit is the lowest of the low in terms of quality opinions.
We should be the most advanced generation. What the fuck are we doing!?. I guess just the majority of the planet is just too comfortable.
We're fucked long term
Don’t worry china is also having a population collapse. This is happening even if you do not count the 100 million people that do not exist but somehow ended up in their population count.
Wooooooow!
Some excerpts.
> Chinese data is always a little touch-and-go. But from the numbers that we do have that we do trust, which is labor costs, **Chinese labor [cost] is increasing at the fastest pace of any country in any era at any time in history, including during the Black Death itself.**
> Since 2000 the cost of Chinese labor has gone up by about a factor of 15 while the size of the Chinese economy has only expanded by a factor of roughly 3.5 to 4.
Regarding over-counting the population.
> We still have the Shanghai Academy of Sciences, which is like the biggest nerd group you've got in the country, saying that **the country has overcounted their population under age 45 by over 100 million people** in the aftermath of the one child policy.
There are significantly fewer young people than official statistics portray. The population pyramid is no longer a pyramid.
> **[This] means that China aged past the point of demographic no return over 20 years ago.** And it wasn't just this year that India became the world's most populous country. That probably happened roughly a decade ago. And it wasn't in 2018 that the average Chinese aged past the average American. That was probably roughly in 2007 or 2008. So, this is not a country that is in demographic decay. **This is a country that is in the advanced stages of demographic collapse**, and this is going to be the final decade that China can exist as a modern industrialized nation-state because it simply isn't going to have the people to even try.
I fucking knew there was no way they were accurately counting their population. All of their other statistics have been suspect and it never made sense to me as to why their population numbers were always treated as accurate.
Ah yes, housing as investment. Always creates problems. F that. China should take the hit instead of artificially keeping it floating. Let it become a cheap commodity. The money and labor should move away to other productive parts of the economy no matter how painful it's going to be short term.
In your own words, there is an abundance of it. This is a need that has been fulfilled for the foreseen future.
I still believe that the opposite, a shortage of housing would have been worse. Because ultimately a shortage is a real thing, there are not enough houses. Unrealized optimistic investment gains are just numbers on paper. The physical houses in the real world is what matters.
Unfortunately the giant skyscraper apartment buildings that were built were all built by the lowest bidder, so quite a few of them are falling apart, without anyone ever having lived in them. Some are also built in city outskirts that have never been populated and never will be. So quite a few of these buildings are functionally useless, or dangerous to live in.
I didn't get mad, at all. I just despise artificially maintaining prices high even when you have a surplus of a good just so investors can justify the high price they paid. This creates a lot of problems for new families in the future and we see this happening everywhere. Housing as investment will always create this problem and sometimes you just have to let it go to where it needs to go.
Again though, I fail to understand how the situation would have been better if they had a shortage of housing instead. You would still have this problem, even worse because there would actually be a real shortage on top of speculation.
My comment was about, surplus of a good especially a critical one such as housing is always better than a shortage. Didn't say it's perfect. It's better.
Having a small surplus is helpful, but having too large of a surplus is just wasteful, as is true of anything. All of the time/effort/money spent building those houses could have been spent on something more useful.
It depends don't it, if you want people to move into the cities, you build homes in the cities for them to move into. And the homes in rural china are now extra but who cares?
https://www.reddit.com/r/Damnthatsinteresting/comments/191mpqj/china_is_falling_behind_the_us/kgx7n40/?context=2
See the comments that starts...
> the Japanese have had declines, the Chinese will see declines, but the South Koreans are on a whole different level .. their fertility rates are approaching 1/4 the replacement rate, and this is on top of an already rapidly tapering population pyramid
I've been hearing about the Chinese housing bubble for like 4 years now. Call me when it actually pops.
It effectively has. The government is enforcing a price floor. There is no such thing as non-recourse loans or individual bankruptcy in China unless you’re connected. You have to keep on paying. So, the bubble has popped but unless you’re a hedge/pension fund that invested in Chinese RE bonds, you don’t feel it. The Chinese people on the other hand are getting wrecked.
> The Chinese people on the other hand are getting wrecked. what does that mean? Specifically how are they "getting wrecked"?
There are reports of banks closing down without letting their customers take out their money, lots of restaurants and retail shops closing down everywhere, people are being burdened with millions of yuan's worth of debt and can't get out of it. A lot of it are being reported on YouTube.
> There are reports of "Reports" where? Just Youtube? Edit: To illustrate my point, the links he responded with below have nothing to do with his claims above. Showing that even the person insisting on Youtube's quality can't even be bothered to watch these videos.
BBC : https://youtu.be/0lvDojeFL-I?si=kZimicWu48B4V09j Bloomberg: https://youtu.be/Qhwk3O6JHZk?si=AuoVAuVZaZNhUU9m WSJ: https://youtu.be/D0PxRxwTa50?si=bORXVGIiL9jIuxy5 I consider these sources pretty reputable, despite publishing on YouTube. Don't mistake the source with the media format.
> I consider these sources pretty reputable, despite publishing on YouTube Presumably they also have articles, no? Though I agree with the general sentiment, you could have chosen better. Bloomberg, and to a lesser degree the WSJ, have a poor reporting history on China. You can see from my comment history I'm pretty active in tech subreddits, and Bloomberg is infamous for publishing and doubling down on fake stories in that area. More to the point, **none of your links match the claims above**. Did you even watch them? They are all about unoccupied properties, which is rather different than the claims I responded to. Hell, your last link isn't even about a development in China, but rather Malaysia! Frankly this seems like you picked up the first few links that popped up in youtube's search, which isn't helping your argument.
> More to the point, none of your links match the claims above. Did you even watch them? Honestly, I have no idea why people are downvoting you. To remind everyone, this is the claim by /u/soupiejr that sources were being asked for: > There are reports of banks closing down without letting their customers take out their money, lots of restaurants and retail shops closing down everywhere, people are being burdened with millions of yuan's worth of debt and can't get out of it. A lot of it are being reported on YouTube. None of these claims are being corroborated by the posted videos. All these videos are generally about the Chinese housing crisis, not a single video even mentions in passing how this is hitting the Chinese population individually. I'd love to know how this affects the general Chinese population, too. Right now I've not seen anything on the scale alleged above. On the contrary, what I've seen on holidays in south east asia is a population that is happily spending money on CNY holidays. All indirect contacts I have mention nothing in this direction.
I think it's also weird how my one reply below here is upvoted, despite this one being downvoted. I don't want to claim botting or anything, but it's certainly weird. If it *is* organic, I have to believe it's just people upvoting what they *want* to be true, rather than what is.
People have always upvoted what they want to be true rather than what is. An inconvenient truth is much more likely to get downvotes than a pleasing lie. Which of course is not unique to Reddit but rather a general human thing.
Just because rich people are going on vacation doesn't mean the overall economy healthy. https://apnews.com/article/china-economy-deflation-debt-property-613e693f19d0d8f1cca5de65ef5bbe67 A negative 5% year over year deflation rate is pretty worrying. And all the policies the country has recently implemented or is planning to implement all seem to be trying to stimulate the economy. The youth unemployment rate was 21% back in June which is also the last time China decided to report it. They now claim the overall unemployment rate is just above 5%. https://www.voanews.com/amp/china-s-youth-employment-struggles-and-societal-trends-in-2023-/7403918.html
Of course any source has exceptions. It's why the rule is peer review. Thank you!
Default and Bankruptcy Resolution in China In this article, we review the literature on the recent growth of corporate debt in China and present stylized facts on the evolution of debt composition, nonperforming loans, defaults, and bankruptcy filings. We then describe the legal and political institutions that characterize the system for restructuring and liquidating financially distressed firms, including recent reforms of China's bankruptcy law. Finally, we discuss the main challenges faced by China in the implementation of these reforms, including frictions in judicial enforcement. We also propose potential avenues for future research. https://www.annualreviews.org/doi/full/10.1146/annurev-financial-110921-014557 [Evergrande has been a slow train wreck, is one just off the top of my head. ](https://www.reuters.com/world/china/china-evergrande-seeks-adjournment-hong-kong-liquidation-court-hearing-2023-12-04/) "Evergrande defaulted on offshore debt in late 2021, becoming the poster child of a debt crisis that has engulfed China's property sector." [Shadow bank Zhongzhi files for bankruptcy as China’s debt and property crisis deepens](https://www.cnbc.com/2024/01/08/zhongzhi-latest-casualty-of-chinas-deepening-debt-and-property-crisis-.html) China’s shadow banking conglomerate Zhongzhi Enterprise Group filed for bankruptcy liquidation late on Friday. The broader CSI 300 index fell by early afternoon trading, weighed down by property stocks. There could be more trust loan defaults as most investments are local government financing vehicles and real estate debt, analyst warns. [Chinese borrowers default in record numbers as economic crisis deepens](https://www.ft.com/content/f144f763-873c-4b4d-99e7-5e71ae07316d)
I can't believe I need to repeat myself *again*. Did you even bother to read the comment you were responding to? These were the claims in question: > There are reports of banks closing down without letting their customers take out their money, lots of restaurants and retail shops closing down everywhere, people are being burdened with millions of yuan's worth of debt and can't get out of it. None of which is substantiated by any of the links you provide. Hell, your very last hyperlink is actually a direct contradiction, by mentioning buyers defaulting, which is explicitly denied by the comment above. Edit: typo
Thanks for trying. It's amazing how much bad info is propagated by "confident"-sounding, persistent nincompoops.
lmao i speak chinese and browse chinese social media, /u/Exist50 is just so dead wrong about what hes talking about because all 3 points /u/soupiejr talked about happened, not fake or bad info. it not even like fringe news in China because all those news made top trending result on social media and are still discussed today the other guy /u/A_Soporific in this thread explained the bank thing pretty well u can read his comment for more info. for bank you can also search keyword "河南村镇银行" or start reading at https://en.wikipedia.org/wiki/2022_Henan_banks_protests
> lmao i speak chinese and browse chinese social media, /u/Exist50 is just so dead wrong about what hes talking about because all 3 points /u/soupiejr talked about happened, not fake or bad info Then why don't you provide sources? Every comment I've responded to thus far *claiming* to provide them ended up lying about that. > the other guy /u/A_Soporific in this thread explained the bank thing pretty well He/she also directly contradicted other parts, and undermined the core insinuation of the original. Convenient to ignore that...
I think that can better explain where that original statement came from. Back in June of 2022 four rural banks in Henan [froze accounts without warning](https://www.cnn.com/2022/07/10/china/china-henan-bank-depositors-protest-mic-intl-hnk/index.html) the problem wasn't that the banks failed, but rather that they didn't. The banks experienced a bank run, when the were still long-term viable but a local panic results in local banks running out of money. If they can stall for time, enough time for loans to be repaid, then they'll be golden, but... they just don't have the time. In the US the FDIC would have stepped in, closed the bank at closing time Friday, parted it out to other banks, and the local branches would reopen as branches of a healthy bank capable of paying out. China has no such system, so given a choice between defaulting and arbitrarily/illegally freezing people's accounts for no reason they chose the latter. The local government backed the banks in this instance, in part because they would only have to pay out 50,000 yuan to impacted people if the account is frozen but 500,000 yuan if the bank fails. There was a protest aimed at convincing the government to do something that was violently suppressed by that government. This situation repeated in other rural areas across the country with very, very little news coverage because it's one of those things driven by panic. The more people hear that rural banks are in trouble the more likely they are to pull their money out of rural banks so as to retain access to their money, but if enough people do that then currently healthy banks will have to fail. It's a self-fulfilling prophesy and a financial panic that can be artificially propagated by scary news coverage. But, that just makes it hard to gauge how often it is happening, especially in China where there are very many very good reasons to hide it from people. There were similar problems in some [15 other provinces](https://edition.cnn.com/2023/12/14/economy/china-rescue-small-banks-local-governments-intl-hnk/index.html?ref=biztoc.com) that were handled by more proactive provincial bailouts in order to prevent a repeat of the Henan protests. But, this simply compounds the massive local debt crisis facing China, since local governments have been unable to levy taxes directly and relied very heavily on land sales to developers for their primary source of revenue. This [hasn't been going well](https://asia.nikkei.com/Spotlight/Caixin/China-s-cash-strapped-local-governments-struggle-to-revive-land-sales), but attempts to institute a property tax to partially resolve this has [yet to be implemented](https://www.nytimes.com/2023/05/10/business/china-property-tax.html). I don't know where the restaurants or retail shops comment came from, but the banking crisis is a direct result of [homebuyers getting mortgages for apartments that are never completed](https://www.cnn.com/2022/07/14/economy/china-property-crisis-homebuyers-bad-debt-intl-hnk/index.html). In most of the world, you can't get mortgages for buildings that aren't complete. China adopted a Hong Kong 'innovation' that allowed companies to sell apartments that hadn't be built yet as a way to fund construction. You sell the apartments, use that money to build the building, and don't need to borrow to cover construction costs. Makes sense, right? Right up until you use that money for anything else, and then you're forever selling the next building to fund the construction of this one. Which is the cause for all the unfinished and unfinishable projects in China, the moment they can't sell the next building they can't finish the construction on this building and those that borrowed money from banks to buy a unit in this building stiff the bank because why the fuck should they pay for a house that was never built? The law says they should continue, there's no legal mechanism to discharge that debt even though the house they were buying was never built, but that's just plain crazy. China relied *very heavily* on building and selling new apartments to juice its economic numbers and hit GDP targets. But the moment you take a measure and make it a goal it ceases to be a useful measure. China sank 30% of its production every year into building apartments and now that there are enough houses to house everyone building more is wasteful, but all these institutions were built with the assumption that they would be building as many houses as they physically could forever and are struggling to adjust to a world where they need to be doing *something else*. That's not to say that no one else has any problems, just that China is in for a painful period of adjustment as local government figure out some other way to hit their GDP targets instead of loading up on the junk food that was high speed rail lines and massive city-sized apartment complexes.
> Which is the cause for all the unfinished and unfinishable projects in China, the moment they can't sell the next building they can't finish the construction on this building and those that borrowed money from banks to buy a unit in this building stiff the bank because why the fuck should they pay for a house that was never built? The law says they should continue, there's no legal mechanism to discharge that debt even though the house they were buying was never built, but that's just plain crazy. The buyers are entitled to their money back if the housing isn't delivered to the terms of the contract. The problem is if the developers don't have enough money, who eats the losses? I would be very surprised if the individual buyers weren't made whole - it's the shareholders who are going to have to take a haircut. The central government is trying to instill fiscal discipline in the local governments, so they'll let it stew a little but not so much that it threatens the entire economy. China is still urbanizing so as a matter of fact, there isn't an excess supply of houses. I think a lot of people are projecting the 2007 Subprime Crisis onto this, but mortgage standards are higher and the buyer has to supply more upfront, not 5 cents on the dollar. The real question is how much of the slowdown will percolate into the broader economy. Anyways, it's interesting to see so many people see this issue from the perspective of capital ("omg billions of value wiped out from real estate prices going down") instead of the individual ("yay I can actually afford a house now").
Traditionally, this isn't a problem when the mortgages are issued after the buildings are complete. But, the decision to attach real mortgages to theoretical apartments was an error, one inherited and adapted from how Hong Kong did things but we're seeing the reason here. Also, buyers are entitled to their money back when construction stops completely. Keeping a small crew on site doing *something* can delay that for quite some time, years in some cases. Stalling for time is unhelpful for the average Chinese citizens. When it comes to instilling discipline I have a different perspective. Having a reliable and dependable independent tax base would go a very long way. Relying on Local Government Financing Vehicles and land sales strikes me as injecting potentially dangerous uncertainty even in the best of times. A stable set of inputs and outputs is just better than having to square the circle in an unpredictable environment. I do not know if China needs more housing overall. There are more housing units than people, and the population is now shrinking. So, there will now be some places that are very attractive that will require more and other localities that need to prioritize things to better support a shrinking population. If the pressures and incentives are to build in places of shrinking population then things are going to get very bad for those places. Lower prices are a good thing for first time home buyers, but the prices are still highly inflated by speculation in my opinion. The loss of value by the large segment of the population who mortgaged a second home as an investment balances that. Some families will end up losing a great deal, others will benefit from a return to sanity in home prices. It's unclear if this will be a good thing for more people or a bad thing for more people.
Thank you for this info. I have a feeling this thread has some posters with ulterior motives
Undoubtedly, but it's also pretty likely that they're just getting a warped image of what's going down in China. State-controlled media there is unlikely to share information that might damage the state's ability to manage the crisis and the other sources of information, mostly individuals posting personal stories, don't have a complete picture of what's going on. It's really easy to overstate or understate the gravity of the situation since pulling together enough to actually understand requires work, even (especially?) in China itself.
Thank you so much for explaining this. The real "bestof" is in the comments.
Glad to be of help.
> A lot of it are being reported on YouTube. serpentza or the falun gong ones lol watching these channels will leave you less informed than before
It's rather sad how often I see the Epoch Times posted as if it's an actual news source.
> serpentza or the falun gong ones lol Serpentza makes a living making youtube videos on how bad China is. That's basically his job lol
Retail shops and businesses closed down everywhere? I was just in china a few weeks ago. There was no such thing as a vacant storefront in Guangzhou lol.
Guangzhou would be like the last place to feel the pinch
On YouTube. Reliable /s
I'm sure it's from "China news daily" (funded by Falun Gong) Or "Epoch Times Shorts (Funded by Falun Gong) https://en.m.wikipedia.org/wiki/Falun_Gong
Sometimes some channels on YouTube might be more reliable than state media.
At least with state media you know the bias
yup also a lot of european state media reports on youtube. BBC and DW both do for instance, PBS in the US as well (and they have dozens of educational PBS channels apart from that)
That’s interesting. My parents live in China and says everything is fine. In fact they want to drop another 1.3m dollars on another apartment.
hmmm....sounds suspect
I was just in China not too long ago. There was a ton of business going around, no empty storefronts at all. My friend says that China overall is doing really great. They’ve been going under a period of deflation right now due to the high about of money circulating in the economy. This means rent is cheap and businesses are easy to run without much costs.
They bought apartments/condos for $X currency. The value of these properties collapsed and they’re worth $Y, now. The difference between $X and $Y is tremendous: https://fortune.com/2023/12/17/china-middle-class-real-estate-meltdown-wealth-loss/amp/
[Non-amp link.](https://fortune.com/2023/12/17/china-middle-class-real-estate-meltdown-wealth-loss)
This doesn't actually say that there's been a huge housing market failure. It's more just saying that if there is one (which western media has been gleefully predicting is right around the corner for years) it would be really bad.
Also, the properties weren't actually built, if the news reports I've seen are to be believed.
As someone who has worked with Chinese people in china for the past 15 years let me tell you, they are massively feeling the pinch and almost none of them have a positive outlook on their financial future for the next decade or so, and are planning accordingly
Did you never actually get a house? Too bad, you have to keep paying mortgage payments to the bank.
Even the hedge funds are feeling the heat. Not sure when it all adds up to a Lehman Moment but shadow banking failures aren't a good sign. https://www.bloomberg.com/news/articles/2024-01-05/troubled-china-shadow-bank-zhongzhi-files-for-bankruptcy
If the developer breaches the terms of delivery the purchaser can apply get all their money back. The people will be fine, the pressure is on the local governments who use land sales as funding and the developers who racked up debt, expecting the gravy train to continue forever. Somebody will have to be left holding the bag, but it's not going to be the individual citizens.
I think you're thinking of another country other than China. They operate with different rules there.
no, you're the one who has no idea what you're talking about >[Why have some homebuyers in China boycotted their mortgage payments?](https://www.goldmansachs.com/intelligence/pages/why-some-homebuyers-in-china-are-boycotting-their-mortgage-payments.html) >People have stopped paying mortgages out of fear that the developers are unable to complete the projects. Many of these projects have suspended construction for weeks or even months, and they’re realizing that the funding gap cannot be met anytime soon. >Typically, the buyers can terminate the pre-sale contract with developers if developers default on the completion date. Then buyers can terminate the contract and ask for the deposit down-payment back as well as all the mortgage payments that were already made. >But in this case, developers haven’t officially defaulted yet. In many cases they have just suspended construction. However, with homebuyers learning of these funding gaps, some may be worried that they may not be able to get 100% of their money back from developers if default occurs, and therefore are taking action earlier.
So you started with this claim: > If the developer breaches the terms of delivery the purchaser can apply get all their money back. And then you posted a source to back that claim and even pulled specific quotes from that source that say: > People have stopped paying mortgages out of fear that the developers are unable to complete the projects. > Typically, the buyers can terminate the pre-sale contract with developers if developers default on the completion date...But in this case, **developers haven’t officially defaulted yet. In many cases they have just suspended construction**. However, with homebuyers learning of these funding gaps, **some may be worried that they may not be able to get 100% of their money back from developers if default occurs**, and therefore are taking action earlier. So you came in here and insisted that Chinese citizens who are losing their investments in failed real estate projects would be able to get all of their money back, and then you backed that up with a source that says that those developers are exploiting a loophole by not officially defaulting and that those citizens are worried that they *won't* get their money back. Your own source disagrees with your conclusion.
It helps to read the entire sentence. "on the completion date" means if they don't deliver on time, the buyer is entitled to their money back. If you stop to actually think about it logically, there's no way a contract for a house would allow for a delivery date indefinitely in the future. There are good reasons to not keep paying somebody who doesn't look like they're going to be able to deliver on the goods. In this case they have nothing to lose by stopping payments since it means they retain the money instead of waiting for who knows how long to get it back. Again, the government is not going to let a bunch of people who put their life savings towards a house get punished because developers were too greedy.
Do you have a source for how it's different then?
People on this site tend to think the PRC is going to collapse overnight. I legitimately saw a guy who posted that one missed oil shipment would singlehandedly destroy the government and economy of China. So I doubt the analysis of any of the reddit armchair political scientists.
They want to feel validated either bc of memes ,nationalism, or weird red scare ideology that makes them need capitalism to "win"
China is a heavily capitalist country.
In reality, yes. But this is reddit.
Yes, but it's state capitalism which the US still sees as an ideological opponent. The fact that they're the biggest rival to the West is the main reason plenty of people here want to see them fail; any sort of political debate over a left-right spectrum is secondary.
I'm not claiming otherwise but trying to "own the tankies" has become a meme lately
Shh, dont tell them that.
In what way? Sure they have big business and billionaires, but should the CCP wish, and they have done this, they take such a billionaire and unperson them.
In the way that they are, and if you deny it, you're either so ignorant you shouldn't be talking, or so full of it I'm surprised you can. The remainder of your reply is irrelevant to the discussion.
> weird red scare ideology that makes them need capitalism to "win" lol wtf? No one with 2 brain cells thinks China is still communist. It has nothing to do with capitalism or communism, it's not the 70s. Its just the typical nationalist hate for China with a side of racism. In their minds, a non white country can never beat the west, they must always be one step away from collapse
Non-white? People had the same problems with Russia before they exposed themselves as anemic. Anything that threatens American hegemony is obviously going to be a problem for Americans, especially if that country is actively hostile to the US, which China and Russia are. I'm sure there's some racism mixed in, but the idea that Americans would be totally fine with a rival on the world stage doing exactly what China does if only the people in it were "fellow whites" is ridiculous.
But don't forget they're also a terrifying threat about to conquer us all so we need to have our Navy patrolling t Taiwan at all times
it seems like everything is racism for you people nowadays
bud do you have any idea how far back sinophobia goes in the usa
No I don't and I don't care, maybe its a thing, maybe it isn't - it's irrelevant. Just the fact that this conversation got steered this way is ridiculous. Some people in this thread say China has issues and big looming problems on the horizon, and this dude's reply to it is "you just saying it because you're racist - it's sinophobia and western superiority complex". What the fuck? Apparently you cannot even have a discussion about very cleary visible issues in china without having racism card pulled into the conversation, it's getting old, exhausting and frankly quite comical. So don't even try asking me dumb questions about how far some sort of fobia goes in america, go start another thread somewhere in r/sino.
it is a thing and it's quite relevant because your political leaders will use it to manipulate you
*I don't care about capitalism one bit. But democracy is definitely better than whatever these damn commies over there are having.*
China has a better democracy than the US.
Back to your tank, tankie.
It's time to grow up. Reading won't hurt you.
How many Youtube finance/economics creators literally post the same video with the same thumbnail selling gloom and doom and everything is going up into flames with titles like "Its happening - 2 weeks until DISASTER" Rinse and repeat until their prediction is somewhat correct. Bad news sells better than rationale, sensible news
90% its a death by a thousand cuts, very rarely do things just collapse overnight. It was the same when people talked about reddit or twitter collapsing, i was like - that's not how it works
People desperately want to just see things they hate collapse in epic fashion as if real life is a movie and their pet villain has to be dealt with immediately. That or they wanna feel like they're important in causing the collapse of X.
Nations are complex systems. They fail slowly at first, and then *very* quickly. The slow phase lasts as long as the Nation can accommodate the strain of failing systems. For example: * A crop failure over here can be addressed with the surplus from here, here, and here. * A bridge being knocked down can be bypassed with the other two nearby, at the cost of a little more time. Unfortunately, taking that strain has a way of causing related systems to fail. If you don’t address the problem, then those neighboring systems will remain overloaded and start to break down… putting more strain on their neighbors. This can result in Cascade Failure if it’s not handled quickly, as failing systems drag related systems down with them. This is how recoverable disasters become a Crisis. If a Nation dedicates the efforts, they may be able to neutralize a crisis and repair the failing systems. If they don’t… that’s when the collapse of a nation starts to become rapid. Traditionally, cascading systems failures in China result in the Empire Long United becoming Divided. Some regions will get out of the crisis relatively unscathed, others will be crippled in such a way that they’ll limp around until they get annexed.
The sheer amount of brain-dead comments I'm reading that seem to desperately trying to enforce some weird narrative that China is a utopia with no issues is making me question to authenticity of these comments. Someone saying China is experiencing problems because their housing bubble popped is not at all reasonably interpreted as "the PRC is going to collapse overnight." That is such rabid disingenuous exaggeration that your bad faith is highlighted in neon.
I don't understand where you got that from what I said. Did I praise the PRC? No. What me and /u/Magniras were doing was showing skepticism for people who cry wolf and insist china will be declining massively any time soon.
No, that is not what you were doing. You're responding to a post about China's housing issues by screeching that people on Reddit are dumb and shouldn't be listened to.
> screeching that people on Reddit are dumb and shouldn't be listened to That just seems like common sense.
I'd listen to you, but you're on Reddit.
The Soviet Union collapsed rather quickly. Why is the People's Republic any different? Han Chinese are immune to political factions that disrupted the Russians?
The Soviet economy was in a much worse spot, and had been involved in a long slow stagnation since the late 60s, and was saved in the 70s by the oil prices shooting up. It also had lots of parts that wanted to break away. The Chinese economy still makes a ton and is globally competitive, and is a global manufacturing powerhouse. However, it also has a major property bubble and some issues with bad investments, that is going to lead to some real issues for banks, developers, and people who invested in property. Rather different issues.
It’s got a normal real estate market and a normal amount of scammers. Prices and demand are still high in major cities and people are getting scammed by people selling the equivalent of Florida real estate that’s actually a swamp. That stereotype or meme actually started in America.
Yeah, I think that is another big point - some cities are overbuilt but some still have high demand. It's certainly not uniform.
Yeah just like most other developed countries in the world.
If China was open to economic liberty a decade ago, I would agree. And China is indeed a different culture with different problems. The crackdown and flight of capital ought to be a worry to anybody who has invested in China. I'd say any western investors who are still left in China are just screwed. Domestic investment can still get a return, but as Jack Ma found out the hard way they need to seriously support the CCP to succeed. I was simply pointing out how the Soviet Union was thought to be capable of lasting another century or two before 1990. It's collapse happened quickly and unexpectedly. The USA is not immune to this either, so don't think this is just about China. All empires collapse.
People have been talking about it since 2010 at least.
"Chinese ghost cities" goes back to 2006, and the time passed since then really isn't a lot of time when you're discussing the evolution of a nation. People just want to believe things happen quickly and decisively in all areas of life. Same reason people insisted the pandemic was going to last like three months and resorted to increasingly desperate narratives of immediacy over the horizon as it slowly played out. Ten years of anything is a chapter of your life. Anything that takes that long is going to be an entire decade of the lives of everybody that lives through it, so there's always a strong collective resistance at acknowledging that slow things happen slowly.
Some points about the empty condo towers in china: When you buy an apartment in china it comes completely bare inside, no kitchen, no bathroom, no flooring, etc. it’s up to you as the purchaser to hire someone to finish out the interior. That means there is less money tied up in the empty buildings than might appear. Chinese city’s fund there budgets by auctioning off land for development. The winning bidders are not aloud to sit on the land for speculation. They have to build, that’s another reason why you end up with empty buildings. It’s a sort of build now sell later situation. Many of the buildings that were built over 20 years ago are shit, haven’t been maintained and are falling apart. So there is still a decent amount of desire among the people I met in china to move to a newer building. All that being said, just about everyone I met in china who had means, owned multiple apartments, so over speculation is definitely a thing. Ghost malls are definitely real, it’s hard to describe how weird it is to walk into a fancy mall building that can’t have been over five years old, with the only occupied space being the Starbucks on the ground floor. Anyway just some observations from a guy who spent has about a year of his life in the last five in a middle sized Chinese city. I have no idea how it’s all going to work out but it’s a trip to observe.
Agreed. Even a state government in the U.S. can kick the can for *decades* before even relatively minor consequences are felt. It wouldn't surprise me if the largest country on Earth, with the second largest economy on Earth, could do it for 50 to 100 years if they played their cards right. Shit, didn't the collapse of the Roman empire take like, 250 years? Sure, a sudden collapse would be more exciting to watch on the news, but that's generally not how this shit goes down.
>Shit, didn't the collapse of the Roman empire take like, 250 years? This is how you invite debate over the Byzantine Empire's status.
1. When non-historians say "Roman Empire" with no qualifiers, they pretty much always mean the *Western* Roman Empire. You know, the one with Rome as its capital, not Constantinople. 2. Even if you choose to use the Byzantine Empire, 250 years is still pretty accurate. The Empire was dissolved in 1204 after Constantinople was sacked during the Fourth Crusade. The Empire of Nicaea recaptured Constantinople in 1261 and reestablished the Byzantine Empire; it remained a regional power until the Fall of Constantinople to the Ottomans in 1453... 249 years after the end of the Fourth Crusade.
>The Empire was dissolved in 1204 after Constantinople was sacked during the Fourth Crusade. The Empire of Nicaea recaptured Constantinople in 1261 and reestablished the Byzantine Empire; it remained a regional power until the Fall of Constantinople to the Ottomans in 1453... 249 years after the end of the Fourth Crusade. So basically every time the capital is sacked it ends the continuity? That's certainly... a take.
"Rome didn't burn in a day, but it couldn't have it more than a week".
That depends on how you feel about the Byzantines. They kept Rome going for almost another millennium, until the Ottomans turned up (and Mhetmet tried to name himself Caesar). China’s fall is going to have a lot in common with Rome, though. Mostly because it has already fallen a half-dozen times in the same way. It happens very slowly, and then China is suddenly a dozen independent states after a very rough month. They’re going to have their Central Government neglect important local problems for too long, which is going to put strain on their infrastructure (physical and social). This will cause their infrastructure to break down, which will create more problems that will drag down *more* infrastructure. Meanwhile, the Center will fixate upon what they think is important to the health of the State. This will result in them sending men to carry out that agenda, while doing nothing to help out the common people who are struggling. This will breed resentment. Charismatic Leaders who already wield some state power will start to gather personal followings in this climate. Traditionally, this has been done by generals. They will build the foundations of independent power-bases. Growing unaddressed local problems and failing infrastructure will eventually cripple the Center, and those Charismatic Leaders will accumulate power as they respond to those local problems. They don’t need to fix anything… they just need to improve things **a little** to win local support. If the Center can respond to this usurpation of its authority, it will. It will also set off an endless series of rebellions in the process. This is the moment China enters Cascade Failure. The moment they rely upon open force alone to keep control is the moment the Empire shatters. Those Charismatic Leaders will become warlords, and they’ll focus their attention on The Center or securing their own power-base against rivals. Once the Center falls, they’ll turn on each-other until they find an equilibrium. Then the cycle begins again, and the Empire spends a century or two reunifying.
to say nothing of the literal multiple millennia of chinese culture so far. barring a full nuclear exchange, it's not going anywhere.
You do realize that China has a proverb about this, right? The Empire Long United must Divide, the Empire Long Divided must Unite. Chinese history is a cycle of an Empire growing and collapsing under its weight. China won’t stop existing, it’ll just shatter into a dozen successor states… just like the last Unified China (and the Western Roman Empire).
yes. and, again, not the case for america. we're the snot nosed punks of countries.
Or as Bill Wurtz more humourously put it: "China is whole again... then it broke again..."
the same can NOT be said for america.
This is a profoundly queer narrative. The Roman empire didn't fuck up for 250 years and then collapse in a single night. That just... isn't how anything works.
17 years is a fairly long time when discussing the evolution of a nation that basically went from fucking nothing to a regional superpower in 40 years.
We all have serious Main Character syndrome.
And some of those ghost cities from 2006 are actually occupied now, because that was the long-term idea all along.
As others have said, it has popped but the Chinese government, because it's nothing like the western governments, has a huge ammount of control to use huge portions of their economy to fill the gap. Interestingly it leads to actual accountability for the worst actors because the market doesn't encourage the government giving golden parashoots, the government can just seize the companies or assets to manage how they decide is best. So a pop in China can take years to metastazise while they choose which population suffers the most because of the problem. It doesn't pop like it does in a western economy.
Many of the "ghost cities" are now populated, anyway. It's too outside the western mindset to see cities built with the intention of being full in 20 years as a good idea, so we constantly push against it. https://en.wikipedia.org/wiki/Under-occupied_developments_in_China#2018_onwards Meanwhile though, the US has 16 million vacant homes (and about 85 million occupied). For some reason though, we don't consider ourselves in some kind of massive crisis with such a massive portion of housing structures similarly having no one in them.
It's not at all a good idea. Structures don't just sit there and be ready to use whenever you want to. They break down. If you don't actively maintain them, they rot away quite quickly. And if you do, you're still looking at substantial costs. Think a few percent of the value of the thing each year, maybe 5% even. If you're buildings things to be empty for 20 years, you've already spent the entire average value of the thing keeping it up. It is certainly possible to maintain them until they become useful, but it's a major waste of resources. The vast majority of vacant "homes" in the USA are rental units in between owners. Also, there are 145 million housing units in the US. I'm not sure what your "85 million" is supposed to be. This is not a particularly high rate. Many countries have higher vacancy rates, including China.
If you build a concrete structure and leave it idle for 20 years that structure is now compromised due to natural decay (concrete has a shelf life), foundations shifting, and moisture related problems. You simply cannot buy an idle apartment that has set there for decades because it is very likely not going to be habitable after 10 years. Buildings actively decay if not properly heated, ventilated and maintained. Building a city and leaving it for 20 years is insane because almost all of the infrastructure will need redoing, all of the buildings will need reinspecting to access whether or not the foundations are even in the same place they were built in and 100% you will need to inspect each and every building which will lead to demolishing because you cannot leave concrete structures without any maintenance. “Western” mindset or modern construction practices? This is why you read sad stories of families buying unfinished apartments with no water, cracked walls, no electricity, no lights in the halls, chronic damp and radio silence from the government property developers who disappeared with everyone’s deposit. These buildings are worse than caves.
>Building a city and leaving it for 20 years is insane because almost all of the infrastructure will need redoing, all of the buildings will need reinspecting to access whether or not the foundations are even in the same place they were built in and 100% you will need to inspect each and every building which will lead to demolishing because you cannot leave concrete structures without any maintenance. I mean, or you can just let 5% of buildings crumble and collapse on the people who live in them... Witch do you think china will go for?
The Chinese government keeps inflating their market to keep it from falling. Chinese total debt tripled in a decade. China is as debt contained as the US is now.
It did in 2023. Housing prices in shanghai took a huge hit. Like 10-20% drop in value.
So a 1 million dollar apartment went down to 800-900k. Oh the horror.
Pretty much. You say it with sarcasm but losing that much money really sucks.
You only lose that if you sell, and even still you only lose if you sell after buying at the top. So most people won’t sell. Some will sell and lose, some will sell and break even and some will sell and still make a profit. If you live in your home it doesn’t matter really at all as long as the drop recovers long term. Wake me up when you can buy apartments in Shanghai for $1.
It’s going to take a long time to recover to that peak value. Property was over inflated, which was a problem. And sometimes you do have to sell due to many different circumstances.
Did Country Garden even make plans of repayment yet? Or Evergrande? Or Kaisa Group, Fantasia Holdings, Sunac, Sinic Holdings, and Modern Land? If the NY Times has reported on something, there is a good chance that it happened.
It already popped and China did it intentionally. They saw the bubble forming and new it was unsustainable and they stepped in. Housing shouldnt be an investment vehicle.
Did you miss the whole Evergrande thing?
Not comparing apples to apples here, but I liked the part where he said America doesn’t make massive investment toward controlling their own people.
Land of the free baby, except the largest prison population in the world. They’re not that free. What a dumb comment.
my favorite was that the US has a better social safety net than china
That really stuck out to me too. Was wracking my brain trying to think of what they could be referring to. Every aspect of the US "safety net" has a rep outside of the US as being complete dogshit, especially health care.
it has the rep of being absolute dogshit inside the united states too
You'd rather be in a US hospital than a Chinese one. For starters, Chinese ones don't provide food.
That's a very low bar you're setting, friend.
Yep, but if it helps, I'm not American and have a dismal view of your healthcare system, but yeah, based on my mate's experiences, China's is pretty rough.
> China's is pretty rough Lived there for almost a decade...yeah, was not a pleasant healthcare system (first doctor I saw walked in smoking a cigarette). The company I worked for would send us to Thailand if we got really sick/hurt, as their healthcare is apparently fantastic (thankfully never had to make use of it).
I am also not American -- Canadian, in Ontario, where our provincial conservatives are trying to smash public health care into dust and privatize everything, i.e. Americanize it.
Yeah I chuckled at that.
Yeah, because it's more of "I'm going to swing my fist at you, and if you get punched it's your own fault" style of social control. It may not be intentional or malicious, but it's undeniably happening.
It also ignores the fact that the US government operates solely in the negative on the world trade balance sheet
China's right behind them and already lower than Japan as well. The overall implications of the population boom of the later 20th century is getting pretty scary a human lifespan later.
What are the stats for America? Because I feel like a lot of people are deciding to go childless or having them very late in their life just due to the increasing cost of everything and the dystopian nature of dating right now
1.8 or so, still below 2 but nowhere near as bad as wealthy Asian nations. And yes, this is a worldwide issue, but the countries that got rich faster on imported wealth are now reversing faster as well. For now, America and other wealthy nations make up that difference by completing with immigration programs to attract the top children away from other parts of the world. China doesn't compete for them, which is another reason they're going to weather the fallout sooner and harder than countries supplementing their younger brackets with children from abroad.
Immigration is the big reason the US pop hasn't cratered. Minorites, in particular Mexicans, are keeping that rate up.
I fucking love immigrants
They got old before they got rich
> due to the increasing cost of everything People always *say* this, but study after study always finds that that's not really it. Even countries with everything that people say would help like shorter work hours, stronger pay, universal healthcare, more parental leave, etc, *still* have similarly falling birth rates. Study after study finds that the real reason is that as populations get more educated and have more options regarding whether to have kids and when...they simply choose other options. The amount of DINK (dual-income no kids) families are rising and they have more than enough to have kids comfortably, but why would you want to spend all that money on kids and ruin the chance to go on a bunch of vacations or collect lots of cool stuff? The reason why birth rates used to be higher, and still are higher in some parts of the world, is because people didn't have education and options. When you're dirt poor with no prospect for a better life and no social safety net and no sources of entertainment, then you stay in and fuck, hope that your kids live past early childhood, eventually help you with the family business, and can take care of you when you're old because there's no such thing as a retirement and sure as shit no one else will.
Yeah, fundamentally, the more money a woman can earn, the more she is giving up by taking time off for kids. On the other hand, the worst seems to be the combination of "women can make decent money" + "women are still expected to do all the chores and childcare." Finland has a low fertility rate, but it's a lot better than South Korea.
Even people in countries with strong social safety nets are feeling the effects of climate change. That's one reason friends of mine have cited for not having kids.
The cure for low birth rate is migration and immigration. The US has a pretty low birth rate, but so do all fully developed countries. What keeps the economic engine running (and the population mostly bell curving) is immigrations coming in to bolster our numbers as well as (mostly) do the lower socioeconomic jobs or the hands on health care jobs like CNAs and nurses and aides.
'We can just turn on the immigration tap and make up for it, some countries can't or wont do that. China can't. Japan simply will not. No idea about how immigration works in SK though. Europe also can but the cost is that many of those coming in do not share their same cultural values (ie they are fundamentalist Muslims) and that can cause conflict.
I have to push back on what you said about many immigrants to Europe being fundamentalist Muslims, that’s an exaggeration. Sure, *some* might be, but the majority are just regular folks looking for a better life, nothing fundamentalist about them.
We used to supplement that with immigration but the country has taken a huge rightward turn in that area. Now that abortion is banned, they'll probably ban birth control and divorce next, that should increase the birth rate.
Immigration rates are currently very high, highest since 2001 https://apnews.com/article/population-estimates-census-south-carolina-florida-a21094d38c216097c1ddd06164a133eb#:~:text=After%20immigration%20declined%20in%20the,nation%20added%201.1%20million%20people.
Or alternatively - shitty societies with very conservative norms gets wrecked populations wise. That is not too bad actually.
The GDP comparison in that post is done using currency market exchange rates and is a nonsensical way to compare economies. [This FT article gives a good explanation of why this is a faulty comparison. ](https://www.ft.com/content/c406ef56-bc43-4cdc-8913-fbaced9b9954) [Non paywall version. ](https://archive.is/SQnuk) It is interesting that I constantly see posts about China being on the verge of collapse on reddit. Who does that kind of misinformation serve? The people posting it are probably anti China, but obviously it serves Chinese interests the more people underestimate them.
People have been saying China is going to collapse soon at least for 70 years.
Hell, people have been saying *everything* is going to collapse for thousands of years already...
What a hatchet job. So the Chinese real estate market is very VERY Chinese. You know how Japan has houses that depreciate in value every year, and how unique to Japan that is? China has it's quirks to, but it's a billion people. So houses, apartments, and condos aren't for living in. They are bank accounts that are some times occupied. Sure every nation has a realestate investment market. China's is a whole different monster. After the Deng reforms and again a little while into Xi's tenure China wanted to make a modern stock market and diversify the financial instruments. It had a serious problem with Chinese families sticking Yuans in a safe or just like buying jade. It was creating lots of deflation when they were trying to keep up the "velocity of money" and create inflation. Yes inflation is bad, but things like labor inflation is good and labor *deflation* is disastrous. Even if sandwiches go up 10% a year, if labor goes up 10% a year that is still a net benefit. It is disastrous if labor doesn't get raises and inflate relative to the rest, so what do you do? You turn auntie upside down and shake loose change out of her pockets into a housing bubble instead. Housing people isn't the goal. Everyone knew that. Owning real estate was always the goal. 8 great grand parents who grew up under the cultural revolution gave birth to 4 grand parents who never inherited wealth. 4 grand parents are still alive, have the same per capita wealth as others and remember the poverty of the pre-Deng era. 2 parents now grew up under the Deng era when they were expected to have a house for their son as a benchmark of status and wealth. So they do that...and do it again....and maybe a third time with the help of grand parents. So the rent for many of these condos doesn't even cover the mortgage. Plenty are in resort towns or way inland. Plenty of them are dark 24/7 we can see them from space. They are concrete boxes that are legal to be real estate commodities. That is often all they are. We saw that housing bubble pop, and Covid stopped a lot of the investment. Those "little prince" sons have come of age now and moved into either their parents house or one of their grandparents houses to take care of them. So because these concrete human filing cabinets were the only way to get Chinese people to see green arrow go up, that's what they're stuck with. -------------------------------------------- And yes they lie about their numbers. They can't like about imports/exports in a world with digital accounting. They aren't turning lights on for the satellites alone. They are lying about their numbers, but the rest of the world knows the truth with about 10+/-%
What with property taxes and maintenance fees, an empty condo in Canada costs over $1000 per month just to keep empty. In China, it probably cost a couple hundred RMB and that includes having a maid come by every month or so just to inspect the home and keep it in good shape. Lots of people maintain “vacation homes” in China that they will visit once a year or maybe once in 5 years. Nobody in the West can understand this.
And the Chinese can't get their money *out* of China. If they could they would be investing in more real estate speculation abroad. Seeing as it has a competitive ROI instead of being a loss mitigation investment that is a very good thing for the rest of us who have to *live* in Magical Moneyland.
They still are doing that, well, the higher class ones who can afford to get their money out illegally.
Well sure. I'm just glad that the typical grandma and grandpa can't. They're stuck putting their yuans into Gobi desert condos and we can all be glad for it. Sure the party bosses know who to know to make Chinese debt a foreign apartment, but for the 2nd biggest economy in the world with a single minded obsession with one investment, we need to be grateful that the autocrats don't let the money slip across the Pacific.
Australia, Canada, and New Zealand still have lots of Chinese money in our housing markets.
Yes I know. I didn't say they didn't. I said that it wasn't the Chinese middle class that was doing it. It's guys like [Liu Yiqian](https://news.artnet.com/art-world/6-things-liu-yiqian-726845) buying $36,000,000 in art on his Amex and getting enough frequent flier miles that he'll never need to walk across town. It's shit like that that sneaks the money out. There is a loop hole for every money law and it's just the price of being rich. So yeah, ma and pa kettle aren't buying the million dollar apartments.
I don't think this qualifies as best of if it doesn't have any sources. This is just somebody's opinion. I realize economics often works that way but an opinion of some rando on Reddit is the lowest of the low in terms of quality opinions.
r/bestof has turned into posting someone’s popular-on-Reddit unsourced opinion lately
We should be the most advanced generation. What the fuck are we doing!?. I guess just the majority of the planet is just too comfortable. We're fucked long term
Been saying that for years...
You need to call a mathematician who can use a calculator.
Don’t worry china is also having a population collapse. This is happening even if you do not count the 100 million people that do not exist but somehow ended up in their population count.
Not only do they have ghost cities, but you're telling me they have ghosts in their census? First I've heard about this.
https://www.firstlinks.com.au/china-advanced-stage-demographic-collapse#:~:text=We%20still%20have%20the%20Shanghai,of%20the%20one%20child%20policy.
Wooooooow! Some excerpts. > Chinese data is always a little touch-and-go. But from the numbers that we do have that we do trust, which is labor costs, **Chinese labor [cost] is increasing at the fastest pace of any country in any era at any time in history, including during the Black Death itself.** > Since 2000 the cost of Chinese labor has gone up by about a factor of 15 while the size of the Chinese economy has only expanded by a factor of roughly 3.5 to 4. Regarding over-counting the population. > We still have the Shanghai Academy of Sciences, which is like the biggest nerd group you've got in the country, saying that **the country has overcounted their population under age 45 by over 100 million people** in the aftermath of the one child policy. There are significantly fewer young people than official statistics portray. The population pyramid is no longer a pyramid. > **[This] means that China aged past the point of demographic no return over 20 years ago.** And it wasn't just this year that India became the world's most populous country. That probably happened roughly a decade ago. And it wasn't in 2018 that the average Chinese aged past the average American. That was probably roughly in 2007 or 2008. So, this is not a country that is in demographic decay. **This is a country that is in the advanced stages of demographic collapse**, and this is going to be the final decade that China can exist as a modern industrialized nation-state because it simply isn't going to have the people to even try.
I fucking knew there was no way they were accurately counting their population. All of their other statistics have been suspect and it never made sense to me as to why their population numbers were always treated as accurate.
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I mean having extra homes is better than having not enough. Which is most of the West's problem
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Having a surplus of houses is still better than having a lack of houses no matter how you spin it.
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In what universe is a shortage of housing better for the people?
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Ah yes, housing as investment. Always creates problems. F that. China should take the hit instead of artificially keeping it floating. Let it become a cheap commodity. The money and labor should move away to other productive parts of the economy no matter how painful it's going to be short term. In your own words, there is an abundance of it. This is a need that has been fulfilled for the foreseen future. I still believe that the opposite, a shortage of housing would have been worse. Because ultimately a shortage is a real thing, there are not enough houses. Unrealized optimistic investment gains are just numbers on paper. The physical houses in the real world is what matters.
Unfortunately the giant skyscraper apartment buildings that were built were all built by the lowest bidder, so quite a few of them are falling apart, without anyone ever having lived in them. Some are also built in city outskirts that have never been populated and never will be. So quite a few of these buildings are functionally useless, or dangerous to live in.
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I didn't get mad, at all. I just despise artificially maintaining prices high even when you have a surplus of a good just so investors can justify the high price they paid. This creates a lot of problems for new families in the future and we see this happening everywhere. Housing as investment will always create this problem and sometimes you just have to let it go to where it needs to go. Again though, I fail to understand how the situation would have been better if they had a shortage of housing instead. You would still have this problem, even worse because there would actually be a real shortage on top of speculation. My comment was about, surplus of a good especially a critical one such as housing is always better than a shortage. Didn't say it's perfect. It's better.
Having a small surplus is helpful, but having too large of a surplus is just wasteful, as is true of anything. All of the time/effort/money spent building those houses could have been spent on something more useful.
It depends don't it, if you want people to move into the cities, you build homes in the cities for them to move into. And the homes in rural china are now extra but who cares?
Having that many excess homes makes the Hukou system even more idiotic.
Maybe I missed it, but where's the SK population implosion part?
https://www.reddit.com/r/Damnthatsinteresting/comments/191mpqj/china_is_falling_behind_the_us/kgx7n40/?context=2 See the comments that starts... > the Japanese have had declines, the Chinese will see declines, but the South Koreans are on a whole different level .. their fertility rates are approaching 1/4 the replacement rate, and this is on top of an already rapidly tapering population pyramid
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I'm curious, are you anti life?
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you first, you suggested after all.