[Cattle Rustler]

(05-17-2014 10:31 PM)Zengling Wrote:  

If you want to know more about China's "ghost cities". This is a great documentary on it: https://www.youtube.com/watch?v=GpnoPhY1f70

In there around the 9:15 mark, it has said that "ghost cities" of today will be filled up 5 years later as a standard development in China (not exactly sure on the veracity of that statement).

I think that as the government realize the death of the "baby boomer" generation, they are going to loosen up its single child policy so they build the cities in preparation for the "nation's rebirth". And as the "baby boomers" dies off, there will be more jobs available for the youngsters and thus they will earn the appropriate amount in order to speed up the economy by purchasing those households and won't make the housing investment a failure.

However all of the above is just a speculation of how things will transition from one state to another and while it sounds good in theory, we have yet to witness how will the Chinese government execute such strategy.

People in China don't want to have kids. They're too expensive, from medical check ups to schooling. Not to mention the food chain is very contaminated and adults are very aware of that.

People won't have kids, the houses will remain empty and start to decompose.

[Zengling]

(05-18-2014 01:14 AM)Cattle Rustler Wrote:  

(05-17-2014 10:31 PM)Zengling Wrote:  

If you want to know more about China's "ghost cities". This is a great documentary on it: https://www.youtube.com/watch?v=GpnoPhY1f70

In there around the 9:15 mark, it has said that "ghost cities" of today will be filled up 5 years later as a standard development in China (not exactly sure on the veracity of that statement).

I think that as the government realize the death of the "baby boomer" generation, they are going to loosen up its single child policy so they build the cities in preparation for the "nation's rebirth". And as the "baby boomers" dies off, there will be more jobs available for the youngsters and thus they will earn the appropriate amount in order to speed up the economy by purchasing those households and won't make the housing investment a failure.

However all of the above is just a speculation of how things will transition from one state to another and while it sounds good in theory, we have yet to witness how will the Chinese government execute such strategy.

People in China don't want to have kids. They're too expensive, from medical check ups to schooling. Not to mention the food chain is very contaminated and adults are very aware of that.

People won't have kids, the houses will remain empty and start to decompose.

Only the middle class realize that, the lower class from rural areas still want to live in modernized buildings because that's a huge upgrade for them. In terms of expenses, I hear that the government pay them very handsomely to move out of their home for further development. And once more and more people goes into retirement, the younger gen have to fill the large population hole left and there will be many jobs available for taking but not enough population to fill all the posts.

[BIGINJAPAN]

(05-04-2014 09:48 PM)Cattle Rustler Wrote:  

(05-04-2014 10:27 AM)BIGINJAPAN Wrote:  

(05-04-2014 10:03 AM)Tail Gunner Wrote:  

(05-04-2014 01:23 AM)BIGINJAPAN Wrote:  

Who knows how things will play out for both countries in the coming decade.

But one thing is for sure, they are both fucked and neither country will look like it does today.

My bet is on the country that hangs its bankers first

lol. In a communist country, however, the rulers are the the bankers. So that won't happen in China -- unless a revolution occurs.

The exact same thing can be said for America

Random question: Why do you hate bankers so much?

Banking is the root of all evil.... the mega banks of this world provide no real service to people or the economy... They are leeches and siphon real capital out of the system... They use credit that they create out of thin air to buy up productive assets while you and I have to work our asses off to build and save to be able to create those assets with our capital

The mega banks fund wars, drug cartels, communism, feminism, and buy off every politician with money created out of thin air.. Except the drug cartels, that they happily launder their money for a hefty fee of 20%

When Bankers get in trouble they never have to admit guilt or get thrown in jail. They pay billions of dollars in fines and are just told not to do it again. Meanwhile you and I can go to jail if you bounce cheques or try to make our own money.

How does the federal reserve help out the main street economy ? They dont. Period.

If they really cared about Americans and the productive economy why didnt they just take their 4 trillion dollar balance and sheet and pay off all the mortgages in America ? Or give every family a million bucks ? The results would have been far better than what is going on now.

Instead they fleece you into believing that they need to buy mortgage backed securities from the banks and that will help out the economy.

I could go on and on about QE and what a disaster it is for americans but how wonderful it is for bankers.

Point is they play by different rules than the rest of us

[Libertas]

Yeah? What happens when China's real estate bubble pops?

[BadWolf]

It never will, according to big brother. If it ever did... well it never will, thanks for your co-operation, you may now return to your scheduled hour of fun.

Quote:

People in China don't want to have kids. They're too expensive, from medical check ups to schooling. Not to mention the food chain is very contaminated and adults are very aware of that.

People won't have kids, the houses will remain empty and start to decompose.

Unfortunately this is not true... not exactly. People in China absolutely DO NOT WANT KIDS, but their parents push it on them. They arrange the marriages in a business deal then 'kindly' remind their kid to push one out or the inheritance is gone. I use to think this was a great strength of China but its actually one of its greatest downfalls. The unwanted children are not taught manners, co-operation, respect or morals, they are simply discarded into schools and taught useless things until their parents are forced to pick them up. Most girls in China are unwanted, like my wife.. her brother is a little dink and he gets EVERYTHING from the mother, even now she's giving him her house, even though he has the one passed down from the uncle already... my wife? She gets to ask 'the foreigner' for money to pay for her brother's kid's food because he's just blown it all on an expensive pair of jeans.

[Samseau]

(05-17-2014 10:27 PM)The Lizard of Oz Wrote:  

If you read the ZH article, you will see that almost none of these images come from the US -- they are from all over the world.

Probably because these countries offer good deals on parking lots. Maybe it's expensive to ship and hold cars here.

Quote:

Why is it surprising that some cars go unsold? And how do you know if it's a lot or a little?

I have eyes and can see? It's pretty ridiculous you can see these cars from google maps. This is de facto over-production being fueled by mal-investment.

Quote:

Also, billions -- there are currently about 7 billion people in the world, do you really think that "billions" of cars are made let alone go unsold?

I have no idea how many there are, but when they stretch beyond the camera lens of a satellite photo it's time to go into the millions.

Quote:

Showing some pics from all over the world with a bunch of unsold cars is not very convincing evidence of a "bubble" in the US. Certainly nothing to compare to entire ghost cities which really do exist in China.

Perhaps you fail to see that those car lots are much greater in size than any of the ghost cities in china? You are looking at millions of acres of cars.

[Dismal Operator]

For me China is where the US was in the 1800s in that they are a power rising on the back of good production and infrastructure development. This is the route by which real, sustainable growth and improvements in living standars are created, as opposed to the current US/West method of depending on perpetual expansion of debt to finance consumption.

China's rise won't come without problems, their real estate bubble/ghost cities are well documented. The US in the 1800s had an analogous problem in the shape of railroad overbuilding. There were numerous bubbles which involved the proliferation of railroad companies which took advantage of the development of the country, particular the Western territories. The problem was they ended up building thousands of miles of track into places which were basically uninhabited at the time, meaning the companies that built the tracks couldn't run trains, meaning no profits, which meant their stocks and bonds were heavily overvalued. The various crashes and panics during the 1800s served to revert asset valuations to sanity, but the key is that underlying it all was railroad track that actually served a good use. It was just a case of 'too much too soon.'

The same sort of thing is happening in China with the overbuilding. Property developers have taken on massive costs to build, and these costs have meant that profitable rent/purchase prices are miles beyond what normal Chinese workers can afford, hence, the buildings and shopping malls sit vacant.

It's obviously not going to end well, but the real question is what will happen when it does happen. In 1800s US, the government basically stayed out of it when the crashes came, meaning the speculators and bankers went bust, and only the prudent who bought solid, stable companies kept their shirts. This was a good thing in the long run, as it allowed the capital to flow to where it was being best used, and the lower prices enabled others to pick up where failed entities left off.

In China, the fact that entire cities of newly built apartments and offices sit vacant when hundreds of millions of Chinese live in terrible conditions should tell you everything. If the market is allowed to function, prices will COLLAPSE, to the point at which those vacant homes get filled. The yuan will rise in value, and the living standards of average Chinese will rise with it.

But 21st century economists shit themselves at the thought of prices falling. The idea that the property developers who overextended themselves must now face huge losses, if not extinction for their mistakes is unpalatable for some reason. The objective positive result of millions of Chinese improving their living standards drastically, and the knock on effects (better health, which leads to longer lives, more productive workforce etc) are to be feared. Instead it is better to artificially prop up asset prices so that the owners of assets can continue to pretend that they're wealthy because the guy in the back office says the numbers look good on the Excel spreadsheet.

That's the only thing that can stop China, which is an adoption of 21st century Western economic policy. It won't be easy, and there will be calamities, starting with the current RE bubble bursting. But IF they take a lesson from 1800s America, they'll get 1800s America results, which was a rise from nothing to the top nation in the world even after the bloodiest war in its history wiped out most of an entire generation of its most able members and destroyed the land.

[Feisbook Control]

(05-17-2014 10:31 PM)Zengling Wrote:  

If you want to know more about China's "ghost cities". This is a great documentary on it: https://www.youtube.com/watch?v=GpnoPhY1f70

In there around the 9:15 mark, it has said that "ghost cities" of today will be filled up 5 years later as a standard development in China (not exactly sure on the veracity of that statement).

I think that as the government realize the death of the "baby boomer" generation, they are going to loosen up its single child policy so they build the cities in preparation for the "nation's rebirth". And as the "baby boomers" dies off, there will be more jobs available for the youngsters and thus they will earn the appropriate amount in order to speed up the economy by purchasing those households and won't make the housing investment a failure.

However all of the above is just a speculation of how things will transition from one state to another and while it sounds good in theory, we have yet to witness how will the Chinese government execute such strategy.

I don't think the relaxation of the One Child Policy would necessarily do anything. Here's why:

TFR by country

Singapore: 0.80
Macau: 0.93
Taiwan: 1.11
Hong Kong: 1.17
South Korea: 1.25
Japan: 1.40
China 1.55

I remember reading somewhere that Shanghai was 0.80.

China as a whole would need to defy the regional cultural trends, and even that of parts of its own country (Shanghai, Macau, Hong Kong, and arguably Taiwan).

Okay, so we might argue that China is not as developed as those nations, and so the great unwashed masses in the hinterland would still breed. I would then compare China to countries in Southeast Asia with similar or even lower levels of development (based upon per capita GDP, in this case the PPP version). GDP per capita is in brackets.

Thailand ($9,875) 1.50
China ($9,844) 1.55
Indonesia ($5,214) 2.18
The Philippines ($4,682) 3.06
Vietnam ($4,012) 1.85
Laos ($3,068) 2.90
Cambodia ($2,576) 2.66

Those countries have very little in common with China culturally. Vietnam is the closest. The trends do not look good though. Thailand is below replacement levels (2.1), as is Vietnam. Indonesia is getting there, and will likely dip below 2.1 within the next decade. The other three countries that have higher TFR than China will likely remain mired in poverty if their TFRs remain at such levels, and they all have significantly worse economies than China. Even if there is a collapse, I don't think China will go back to Cambodian levels of development.

The first list is countries that share much more culture in common. I would expect China to trend towards South Korea than Cambodia, both culturally and economically. I don't see the relaxation of the One Child Policy having much effect at all.

[BadWolf]

Quote:

In China, the fact that entire cities of newly built apartments and offices sit vacant

Where are these vacant apartments and offices? There are loads of vacant shopping malls though but its pretty much because Chinese have quite a great deal of trouble coming up with anything original. Every store in China is a copy of another store 3 doors down.

[Samseau]

There are definite problems with that ZeroHedge article I posted. http://jalopnik.com/that-zero-hedge-arti...124255/all

Turns out a lot of the photos are old. So perhaps the mal-investment is not nearly as bad as it looks. Perhaps China is still in the lead on mal-investment.

[kosko]

China's Ghost cities are a military play as much as a GDP play. China is rational in viewing conflict with America as almost certain. It's fear is that any major cities that are bombed/nuked into dust and these ghost cities were created to move populations to quickly of a war was ever to break out.

These ghost cities have the capability of house 64 million Chinese. They are essentially relocation centers.

America has the same idea it's just they purpose built for military, data, and COG, just not for it's own people.