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Strongly suspect China's downfall will begin with their real estate sector. RE is nearly 25% of Chinese GDP. And god knows how much of Chinese GDP is fudged. China's problem is debt, and RE plays a big part of it. and RE is come to a grinding halt. +
+ I mean just look at the numbers. On average the largest Chinese RE cos have a net debt that is three times their equity. Property sales are down hard. Property is the collateral behind 40% of loans taken. Much of their public services are funded by land sales.
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China is sitting on 3 BILLION square meters of UNSOLD residential property per some estimates. China invested US$1.4 TRILLION in its property market in the last 12 months. This is more than US$900bn that USA invested at the peak of its own housing bubble.
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China is sitting on 3 BILLION square meters of UNSOLD residential property per some estimates. China invested US$1.4 TRILLION in its property market in the last 12 months. This is more than US$900bn that USA invested at the peak of its own housing bubble.
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As Ive written about countless times before, China is leveraged at all levels: Govt, Corporate, and Household. No one can bail them out. Households have borrowed about 60% of GDP. Household debt to income ratio is 99.9%! Housing loans are 60% of HH debt.
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As Ive written about countless times before, China is leveraged at all levels: Govt, Corporate, and Household. No one can bail them out. Households have borrowed about 60% of GDP. Household debt to income ratio is 99.9%! Housing loans are 60% of HH debt.
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China is riding a debt bicycle, ie it can only stay balanced as long as the govt keeps peddling. More and more debt being pushed into the system to hold up property prices. But this cannot go on. Oh the crash will be epic. Remember this tweet series.
China is riding a debt bicycle, ie it can only stay balanced as long as the govt keeps peddling. More and more debt being pushed into the system to hold up property prices. But this cannot go on. Oh the crash will be epic. Remember this tweet series.
+ For those interested in my earlier detailed analysis, do read:
http://ecopoliticalindia.blogspot.com/2020/02/china-till-debt-do-us-apart.html
http://ecopoliticalindia.blogspot.com/2020/02/china-till-debt-do-us-apart.html
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And ill tell you what will derail China. When their government realizes that they cant keep printing money, they will take steps to rein it in, like increasing interest rates. And that will bring about the crash. Maybe next year, or 2 years from now. But feels imminent.
And ill tell you what will derail China. When their government realizes that they cant keep printing money, they will take steps to rein it in, like increasing interest rates. And that will bring about the crash. Maybe next year, or 2 years from now. But feels imminent.
