fawnpass

China in a Bubble?

CHina Interest-

"The property market is a massive bubble - there are literally thousands of empty residential building throughout China, from 1st tier to fourth. Take a look at night at all the buildings without lights on."
What you write is true, but does not explain the full picture. The reason for the empty buildings is that there has been a build-out of large high-end luxury apartments. Most folks that can afford these buy one to live in, and several for speculation. As housing prices drop and/or lack of buyers, they are content to sit on the empty property rather than take a loss, and are not buying more. However, there is a supply shortage of new "normal smaller sized apartments" the kind the average worker wants and can afford, which in turn pushes up the price of smaller and second hand apartments. From the developer's view, luxury apartments make more money so that is what they build. An analogy for this dislocation would be if all of the sudden the only new cars available for purchase were ferarri and mazerati, hence the problem. This problem will only go away with more government-subsidized affordable housing projects.

The Year of the Ox Arrives in China, Land of 'Currency Manipulation'

Not sure which bank you are using in China, but I have made one time withdrawals of over 100,000 from single accounts at both the Bank of China, and Industrial & Commercial Bank of China, in the last couple of years and as recent as last month; they do not have daily limits on withdrawals.


On Feb 02 10:41 AM hazenyc wrote:

> i think he is implying the daily ATM limit is in place to prevent
> mass withdrawls a la A run on the bank...
> You can go inside and cash out ur account in a cashier's check the
> ATM limits are in place to: prevent most people from accidentally
> withdrawing too much money from their measley checking accounts..
> and to ensure the machine doesn't run out of money!

Chinese Youth Will Propel Economic and Political Changes

The author of this article clearly knows what is going on in China; it concurs with my own "on the ground" observations. It amazes me how many posters have commented negatively on his article, who clearly have never been to China. Probably the same bitter financial experts who didn't see the current real estate or financial crisis coming.

It's 1974 for the U.S., but 1929 for China

I am in China. It is obvious this author is not. I, too, along with other posters are curious about how this article got published here, and it questions the credibility of this site.

Opportunity to Sell Into China's Illusory Stimulus Package

This author, it seems, can't see the forest through the trees. He is correct in saying that the stimulus package is largely illusury, but his conclusion is faulty. The stimulus package is illusury in the sense that many of these projects, as the author stated, are already works in the pipeline. So, in essence, the Chinese government has labeled infrastructure projects that have already been planned as stimulus. This functions to reassure the world that the Chinese government will continue to invest large amounts of money on future growth even amidst a current downturn of manufacturing. It also serves to reassure investors in the chinese stock market, supporting the index. You must also keep in mind that as governments around the world infuse money into systems where large amounts of "paper" capital have vanished, in order to insure ongoing operations, the Chinese government's money spent is going into real concrete products, that will serve to create even more capital in the future.
Of course, short term rallies will offer opportunity for profit taking in such a volatile market, on this point the author is also correct. However, it would also be wise to take a long term investment position as well as a trading position in China at this time.

Get Ready to Buy Like It's 2002

You are wrong on China. It is obvious you have not been there to see what is happening. China is not Russia. It is the last large economy to feel the world downturn and will be the first to shoot out of it. The government has many macro and micro tools yet at its disposal, and they are still ahead of the problem. There will of course be some dislocations and adjustment (mostly in export/shipping related industries), but they will be relatively isolated. Most export companies are already shifting their focus and adapting to other markets. Those that do not will go under or be consolidated, which will be good for the long term health of the Chinese economy. Companies with sound financial positions will continue to experience growth as the US markets rise a bit then stagnate for years to come and the hot money will follow the results. You should be in CHina now, but smart about it.