Wikinvest Wire

China's property bubble

Thursday, January 21, 2010

The Bank of China is now reining in lending, apparently trying to avoid the realization of a recent forecast by Jim Chanos that China is "Dubai times 1000". From the looks of the CNN video below, the property market looks to be at least Dubai times two or three.


They really need to do something about the air over there - how can people stand it?

7 comments:

AJ said...

Wow, you're right about the air. That's just awful. China really needs make something like the EPA...

So, if their bubble bursts and they try their hand at deficit spending...who buys their debt? Us?

Anonymous said...

On China bubbles, keep this in mind. They have seen the Cultural revolution, a civil war and brutal foreign occupation all within the last 70 yrs. Whatever bubble has to burst will not take people long to get past. Also, they don't yet have an entitlement mindset like we do here.

Anonymous said...

yes. China could lend us money in order to buy China's debt. Goldman Sachs can be the middleman and collect huge bonuses for doing nothing. That should keep the Ponzi scheme going for a while longer. More importantly we can keep our obligation as American Citizens to keep GS bonuses intact and hopefully ever increasing.

Anonymous said...

(On China bubbles, keep this in mind. They have seen the Cultural revolution)
Agreed .... I visited China this last summer. Shanghai is definitely in a bubble, but I don't see this as but a small burp in their progress. Great history, hard working, ambitious and lots of young pretty girls... none of which seem to be over 120lbs. A bit lacking in sophistication, but that will be learned like everything else.

jmf said...

Moin from Germany,

excellent clip....

From todays WSJ

Certainly, with official government debt under 20% of GDP and nonperforming loan ratios under 2% at the country's leading banks, neither the fiscal position nor the financial sector look stretched. But 2009's lending has surely stored up some problems for China's banks. If, say, 20% of 2009's new loans go bad, and 10% of likely new loans in 2010 also run into trouble, total nonperforming loans would reach $381 billion, or 8% of China's 2009 GDP, UBS economist Tao Wang calculates. Nor has China ever truly resolved the bad debts it shifted off banks' balance sheets a decade ago.

Local government debt, too, has been mounting. These figures are excluded from the central government's debt picture. Wrapping them in could at least double the fiscal debt to GDP ratio, it's estimated.

Anonymous said...

Isn't the male/female ratio something like 6/5 there? That's going to be interesting.

marina said...

According to me,china is progressing in lot of ways

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