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Q: When will this huge house of cards collapse?
I think anyone who has lived here more than five years knows that just about everything here is either a grand illusion, artificially manipulated, or simply just plain fake - including the economy, housing market, currency valuation, poverty levels, etc. When do you think the facade will implode?
i dont think anyone understands the housing market in china
It may be impossible to say exactly when, but from all statistics and economic data, the patient is sick, getting worse each passing day, and remedies are not doing a thing. Face is more important than people's economic stability.
When it happens, it will be a rude awakening, and guess who will get blamed for it?.
mArtiAn:
Who? Seriously, i've no idea. Or do you mean, you guess 'Who' will get blamed? Who's who, some Chinese guy? I think it's spelt Hu. Ok, i'll stop here before I start doing the 'Who's on first?' routine in entirity.
I don't think it will 'collapse', 'they' have been predicting that for 30 years.
The housing sector is already being very carefully monitored and while there may be an adjustment city to city, (i.e. read, I hear Beijing and Shanghai are way overpriced) nationally I don't think there will be too bad an adjustment.
Nationally, again not a collapse but there will definitely be change, already the leadership have released (sketchy) details of a plan to move from high volume low quality to low volume high quality manufacturing, indeed I think the most dynamic career path for 'westerners' wanting to work in China will be QA. The risk is in the transition, change is always risky, especially given the politics of China and the time it takes to turn a ship of this size. That is why I posted elsewhere that I was very interested in the mild criticisms in Xinhua and other official press sources of the government, as I think it may be an indication of what the 'new' leadership are going to prioritise.
To those who may be hoping for collapse be VERY careful what you wish for, China's economy is very closely intertwined with the global economy, there will be no collapse of China without a connected world wide collapse and with China owning an incredible amount of US bonds, EU bonds and blue chip shares of all nations, if China goes south so do we!
mArtiAn:
Well personally I agree with the fella on that Zeitgeist movie; there will be no end to the economic system without the system first failing entirely. So bring it on, I say.
I agree Geezer. So much of what we see in China is really just a great facade. And because they don't let any of the money trickle down to the common people, I think the collapse will be sooner - rather than later.
snowballeffect:
Could it be it doesnt trickle down fully yet because its still a developing country that needs time to develop infrastructure and control, and expand revenue sources? I'm sure when the UK and USA and most other western countries were 'developing' they also had a larger no. of people below 'the Wests' perceived poverty line?
I just read another post here that documents China's $3 Trillion national debt. Learning this for the first time now makes me agree with The Dude & Geezer - the bubble will burst within a year or two. I also learned that in 2011, all the State Owned Enterprises were ordered by the party leaders to invest 10% of their resources into the acquisition of Beijing real estate - to prop up the main economic indicator. So now 60% of all new housing built since 2010 remains unoccupied. This is really the classic textbook example of "smoke and mirrors."
The same economist who predicted the US collapse has said China is going down in 2015. I'll stick with this date as well. Sure don't wanna be there when it happens. Could spur a civil war.
I agree with HGE assessment above. There is a different political structure in place in China than in Western countries that does not want to loss its power nor its power base; additionally the country has huge amounts of reserves and it can weather the storm. Thirdly, it has a huge mass of people that want to join the middle class or the upper class and upward mobility is still available here. Fourthly, there have been masses of Western pundits predicting the demise of China for years and years.
nevermind:
Keep telling yourself that. It'll help when you're in the fetal position as the impoverished Chinese collect their pound of flesh from the corrupt class that's been exploiting them for a generation.
It's hard to say for sure....but I do see a lot of long term & short term problems facing China and if they don't get resolved the consquences will be huge.
1) A huge housing bubble....the housing/construction market eventually will crash in China. And when it does it will be much larger than anything America or other countries saw....already I see signs of it every day. Buildings being built but remaining empty, that's not a good sign.
2. An economy too heavily based on foreign export. A large % of China's economy is because of foreign export and foreign countries coming here for cheap labour. As wages go up more and more companies/countries are leaving and going elsewhere. China government has tried hard to get consumer spending to increase in China but haven't had much luck overall, until China's economy can become based more on it's own people instead of foreign influence/business this is a very big longterm threat to the economy.
3) Pollution. I don't think I need to explain the short term & long term problems with pollution if things dont drastically improve.
4) Over population. Never everwhere is overpopulated in China but the places that are you can already start seeing critical infastructure starting to burst at it's core. This is something to be very aware of.
5) An aging population. China is getting older not younger....an older population is going to cause all sort of problems such as work force and the need to help take care of the elders
6. An unnatural ratio of women to men. The ratio of women to men isn't natural in China and the numbers are very different compared to other countries. This might not seem like a big deal but it can lead to all sorts of social problems. When the ratio gets out of wack like this it can and does lead to social problems like violence, sex crimes, depression, etc etc. If someone has a hard time falling in love and finding that special person, it can mess with their brain and cause them to act out and do crazy things
7) Education. I certainly admire how hard so many Chinese students work to get an education, it's pretty insane to see the hours they put in sometimes. But one has to ask, why do so many people in China feel the need to send their children to schools abroad or for students to get a degree in another country. I'll tell you way...its because the education system in China simply isn't as good. Poor education leads to a poor future more times than not.
Just my opionon. These are some issues I've noticed with China and if left unchecked or if they can't be improved they will all end up causing problems for China. If these things happened combined and around the same time, it can cause a HUGE problem for China.
8) Lack of creativity...as cheap labour and manufactoring/exporting jobs start to leave, the best next thing for a country is it's ability to invent and create new things. Due to the political system in China and the way education is tought, China simply lacks the inovation that many other countries have. Put it this way, how many Chinese brands/products do you see that are popular in other countries. Almost none. Yet you go to a large mall in China and foreign products are very popular, these foreign products are popular due to innovation and creativity. This may not be a big deal but if China continues to rely too heavily on exporting for it's economy it becomes a big problem down the road if those jobs leave China.
It must be soon since all the wealthy people are leaving China or as the NYT just reported, sending billions OUT of China. Surely the insiders already smell the coffee and... so should we.
snowballeffect:
Maybe they just didnt want to live in a country thats still developing. If I had billions of yuan I certainly wouldnt want to live here.
Well, judging by the Bo XiLai fiasco and the recent $2.7 Billion revelation, my answer would be much sooner than later - perhaps within the next few weeks.
