WGR Werk, Geldzaken, Recht en de Beurs
Hier kun je alles kwijt over sollicitaties, werksituaties, belastingen, (handelen op) de beurs, hypotheken, beleggingen en salarissen, arbeidscontracten of geschillen met je (huis)baas. Alles over werk, geldzaken en recht dus.
Je zou brazilie en china kunnen hedgenquote:Op zaterdag 2 oktober 2010 10:45 schreef Blandigan het volgende:
[..]
Europa doet er ook vrolijk aan mee.
We produceren haast niets meer, behalve "diensten".
Onderwijs wordt uitgehold.
Ik word er toch wel somber door...
I am a Chinese college students, I have a loving father, but I can not help him, he needs to do heart bypass surgery, I can not help him, because the cost of 100,000 or so needed, please help me, lifelong You pray Thank you!
Denk eerder het veilig opslaan van containers waar mineralen in zitten die uit Afrika komen.quote:Op zaterdag 2 oktober 2010 19:16 schreef dr_Pieters het volgende:
[..]
Wat zou hier de motivatie van China zijn? Iemand enig verstand van macroeconomie en politiek hier?
China heeft geld teveel, beetje shoppen in Europa, niks mis mee.
No bad soldiers under a good leader
Ik las vandaag een leuk stukje over Jim Chanos in Fortune magazine. Gelukkig ook (aangepast) online te lezen
http://finance.fortune.cnn.com/2010/11/17/chanos-vs-china/quote:Chanos vs. China
Posted by Fortune
November 17, 2010 3:00 am
The influential short-seller is betting that China's economy is about to implode in a spectacular real estate bust. A lot of people are hoping that Chanos - who called Enron right - is wrong this time.
By Bill Powell, contributor
The scene is a cocktail party high above the Shanghai skyline on a summer night a few months ago. Our host is a Master of the Hedge Fund Universe, one who doesn't want to be identified in the press. We'll call him Pete. Pete comes to China at least twice a year to stay abreast of what's happening in the world's most dynamic economy. He has said, in fact, that if he didn't have kids in school in the U.S., he would consider moving here, so bright is the future. In attendance are other hedge fund investors, venture capitalists, and fund managers, China bulls all. If there is one sure-fire way to ruin the atmosphere on such a pleasant evening, it is this: Ask the crowd what they think of the legendary short-seller James Chanos, CEO of Manhattan-based Kynikos Associates.
So that's what I do.
"Hey," I say to a cluster of people surrounding Pete. "Did you guys see what Jim Chanos said about China on Charlie Rose the other night?"
"No," says an American venture capitalist working in Shanghai. "What did he say?"
"He said, 'China's on an economic treadmill to hell.' "
For over a year now Chanos -- the man who got Enron (among other things) right before anyone else -- has been on a rampage about China. The guy who became famous -- and rich -- shorting companies now says he is shorting the entire country.
When I mention the "treadmill to hell" line to the group in Shanghai, the reaction is the usual one when Chanos's name comes up here: "What does he know about China?" the American VC asks. "Has he ever lived here? Does he have staff here? Does he speak Chinese?"
The answers are no, no, and no. But our host, who counts Chanos as a friend, knows that is not the point. "He did get Enron right," Pete says. "And Tyco. And the whole mortgage bust." He concludes: "Look, he may be wrong, but you need to tell me why he's wrong, not point out that he doesn't live here."
Chanos smiles when I relate the story to him on a recent morning in New York. He knows what a lightning rod he has become. "The only time I have ever been heckled giving an investment presentation was earlier this year at Oxford," he says. "Some Chinese graduate students got so annoyed with me that they started to shout me down, saying the same sort of stuff: 'What do you know about China? How dare you say such things!' "
It's not, of course, just young Chinese people who get worked up on the subject. What Fortune Global 500 company isn't betting that China is the future? For many companies, the possibility that Jim Chanos could be right, that there could be a U.S.-or-Japanese-style bust in China, is beyond scary. It's unthinkable.
Something unprecedented
How did Chanos come to his China obsession? It started in 2009, when he and his team at Kynikos looked at commodity prices and the stocks of big mining companies. "Everything we did in our microwork [on commodities] kept leading us back to China's property market," Chanos says. China's construction boom was driving demand for nearly every basic material.
One day, at a research conference in 2009, Chanos listened to an analyst tick off numbers about the scale of China's building boom. "He said they were building 5 billion square meters of new residential and office space -- 2.6 billion square meters in new office space alone. I said to him, 'You must have the decimal point in the wrong place.' He said no, the numbers are right. So do the math: That's almost 30 billion square feet of new construction. There are 1.3 billion people in China. [In terms of new office space alone] that amounts to about a five-by-five-foot cubicle for every man, woman, and child in the country. That's when it dawned on me that China was embarking on something unprecedented.''
Kynikos didn't post anyone in China. Analysts make occasional research trips, though Chanos himself does not. Given his reputation there, he says, "it's probably best that I don't go. I can just see the New York Post headline: NEW YORK INVESTOR KILLED IN MYSTERIOUS ONE-MAN EARTHQUAKE."
Chanos says that underlying his firm's analysis are data the Chinese government itself reports publicly, such as numbers from the Bureau of Statistics and the National Development and Reform Commission, the country's most powerful economics ministry. In the past year, he says, his team has developed a "proprietary database" that tracks real estate sales in China. "We are not fudging data or just hearing or seeing what we want to hear and see," he insists. And he has a standard retort to those who say you can't know China because you don't live there: "I didn't work at Enron either."
So many empty properties
To understand Chanos's China skepticism -- he calls it "Dubai times 1,000" -- it's worth visiting the Rose and Ginko Valley housing development near Sheshan Mountain, a new suburb outside Shanghai. Block after block after block of villas have gone up. And they are empty.
In the country's largest, most affluent cities -- Beijing, Shanghai, Guangzhou, and Shenzhen, known as tier-one cities to the real estate cognoscenti -- it is not an unusual phenomenon. There is a lot of new, unoccupied housing in China. Just how much -- and just how much of a concern it should be -- is a central debate.
Fixed-asset investment accounts for more than 60% of China's overall GDP. No other major economy even comes close. And of that fixed investment, slightly less than a quarter is attributable to new real estate investment.
There are reliable data on the amount of new construction under way each year, and on how much is sold. In 2009, for instance, buyers in China purchased 44% more residential floor space than they did in 2008.
Unoccupied houses in a subdivision in the Kangbashi district outside Ordos City, Inner Mongolia
But there are no official estimates yet for the vacancy rates for private housing, for how much of that new housing bought is actually occupied. (The government, signaling that it understands how much it matters, is carrying out a census now to try to get a grip on the question.)
Consider the Sheshan project. A spokesman for the Chongqing-based development company would say only that almost all the units were sold in advance. That, in fact, has been standard-operating procedure in the market for new housing in China. Buyers plunk down money based on a plan, and the developer takes those commitments to the bank to get financing for construction. Very few projects are done on spec.
But that still leaves the question that makes a lot of people nervous -- and Chanos bearish -- about China: Why are so many flats and villas that have been bought and paid for empty? And how could that augur anything but pain for the real estate market in China? And if it means pain for the real estate market, considering that new property sales accounted for 14% of GDP in 2009, doesn't that mean trouble, sooner or later, for the broader economy?
That the real estate market in China is hugely speculative is not in dispute. An investor who lives near me in suburban Shanghai has bought -- count 'em -- 43 units over the past three years. He is still sitting on them, because, he believes, prices will continue going up.
Chanos ticks off reasons for that kind of behavior. Individual Chinese investors are limited in where they can put their renminbi. They can stash it in a standard bank account and receive a negative rate of return, given an inflation rate running at about 3%. They can put the money in the stock market, but equities in China are much more volatile than those in developed markets. Capital controls limit investment opportunities for individuals abroad. So that leaves real estate.
Chanos acknowledges that China's emerging middle class sees real estate as a store of value. To many, buying an apartment in Shanghai or Beijing is like buying a bar of gold. And many -- "too many," Chanos says -- have kept on buying as prices have gone up in the past five years.
Chanos's team, like a lot of other people, is trying to get a grip on just how many empty units there are in China. One prominent bear in China, independent economist Andy Xie, has put the amount at the equivalent of 15% of GDP. Chanos doesn't endorse that specific figure but believes "it's a big problem, and it's getting worse, not better, as more units come onstream."
Chanos: Right or wrong?
There's no question the speculative fervor in real estate has captured the Chinese government's attention. Last spring Beijing moved to stiffen financing requirements, and it is trying to limit the number of units any single investor can buy to two. For a time that did cool off the market. But Chanos points out that prices are rising again, and more than 30 million new apartments, villas, and houses are due to come onto the market next year. If the government intensifies its efforts to try to limit speculation, the market may turn down sooner than most think, Chanos believes. And if the government doesn't intensify the effort against speculators, "they'll just be climbing up a few more rungs on the diving board." Either way, he says, "they're going to end up in the same place." Consider Dubai, he says: At the peak of its building boom, there were 240 square meters of property under development for every $1 million in national GDP. In urban China today that ratio is four times as high. "We've seen this movie before," he says. Whether it was Dubai a couple of years ago, Thailand and Indonesia during the Asian crisis of the late '90s, or Tokyo circa 1989, "this always ends badly."
Chanos puts his money where his mouth is. Late last month he went before the Grant's Interest Rate Observer conference at the Plaza Hotel in Manhattan and not only made his case for being bearish on China, but ticked off individual stocks that he is shorting. Poly HK is one: a real estate developer that trades on the Hong Kong exchange (and a company that Goldman Sachs (GS) recommended as a buy as recently as last month). It's a state-owned company that started out as a defense contractor but, enticed by the real estate boom, has plunged in as a property developer. Chanos is also short the listing for the Hong Kong Stock Exchange. And he believes that China Merchants Bank, one of Beijing's largest, is deeply exposed to the financing affiliates of local governments throughout China. About 11% of its total loans outstanding, according to Chanos, are to these local financing affiliates (known as local government funding vehicles, or LGFVs).
Why does that matter? A key prop under the bullish case for China's real estate market is lack of leverage. The financial system is simply not going to be at risk, the thinking goes, even if there is a real estate bust. But Chanos believes the LGFVs are deeply exposed to property development, and that if there is a turn in the market, the pain felt by China Merchants Bank, as well as others, will be considerable. Victor Shih, a professor at Northwestern University, did a study earlier this year and concluded that these LGFVs accumulated $1.6 trillion in new debt from 2004 to 2009. As Chanos points out, China's own bank regulator has recently been moving to rein in local borrowing, after concluding that 26% of the outstanding debt is "high risk."
A downturn in China would have serious ripple effects throughout the world. Chanos believes the iron ore producers, and Brazilian giant Vale (VALE) in particular, will be victims. China's huge capital investment has required vast amounts of steel and other metals, and that in turn has made it the largest market in the world for iron ore. Vale traded in early November near a 52-week high, and its CEO, Roger Agnelli, recently boasted that he has the biggest fleet of ships in the world outside of the U.S. Navy. If you take Chanos's view of the world, that's not a good thing. As he put it, "They're going to have a lot of empty ships on their hands."
A case for the bulls
Short-sellers are generally derided until and unless they turn out to be right. So it is now. Sentiment about China is so optimistic that people think Chanos either has lost his mind or is somehow involved in a giant hip fake and can't really be serious. (For the record, he won't say how much of Kynikos's more than $1 billion under management is in play in China-related positions.) "Why do I go public with this?" he asks. "For the same reason I did with Enron. All the public ever hears is the longs. I have a case to make, and I have no hesitation making it. These are our convictions about China, and we're acting on them. So argue with me. We want to hear the counterarguments. Believe me, we do.''
Plenty of people are willing to take him up. The China bulls' case has many parts, but the most important is leverage -- or rather, the lack of it. Consider the gentleman -- his name is Cheng Yue Shi -- who told me that he owned 43 flats in and around Shanghai. He doesn't rent out any of them -- which is not uncommon in China; rents are cheap, and many owners therefore believe the time and hassle of being a landlord isn't worth it. And of the 43 units he owns, he paid for every single one of them -- not a single mortgage involved. According to a recent study by CLSA Asia Pacific Securities, the use of mortgages is increasing in China, but only 40% of all houses purchased are debt-financed. Even when they are, Chinese buyers typically have to put down 30% or more of the sales price.
No liar loans here. No securitization of mortgages. This is housing finance done the old-fashioned way: The buyers have skin in the game. The lack of leverage throughout the system should mean that even if there is a significant decline in real estate prices, the financial system in China is unlikely to be crippled.
Chanos argues that there is more debt held off the books in local financing vehicles than the bulls care to admit, and that bad loans, once the real estate market turns down, will pile up more quickly than most think. This is an area in which government regulators in China have acknowledged they need to get more information into the marketplace, but even with what's known publicly, the bulls simply disagree with Chanos. Arthur Kroeber, managing director of Gave- Kal Dragonomics, a Beijing-based economic consultancy, says the central government is already forcing local governments to scale back borrowing, and in fact has ordered closed several LGFVs that did not have enough revenue to service their loans from banks. "China's government debt," Kroeber says, "is clearly manageable."
The second component of the bullish case is straightforward: They say the combination of price spikes and overbuilding in Beijing and Shanghai simply gets too much attention. Andy Rothman, the chief China economist for CLSA, notes that the total amount of floor space bought in smaller, tier-three cities (where nearly 357 million people -- or 57% of China's urban population -- reside) has been slowly increasing as a percentage of the national total. And in those cities prices are up to 70% lower than they are in the four richest cities in the country: Beijing, Shanghai, Shenzhen, and Guangzhou. "There is no national housing bubble," Rothman asserts.
The guy who'll get China over the goal line
Personal income, moreover, continues to rise in China, as does consumption. In the first half of this year, real urban disposable income rose by more than 6%, on top of a 10% rise last year. "Rising incomes still support middle-class affordability," Rothman says. As a result, "it's the world's best consumption story."
Chanos's response to those two basic points is forthright: "It's an economy on steroids," he says. Just as Japan in the 1980s grew largely on the back of capital investment, eventually it has to stop. "Japan became a capital-destruction machine, and that's what China is now. You have an economy that's 60% fixed-asset investment, and not even in the developing world is that sustainable. It wasn't in Japan; it wasn't in Korea."
Chanos is agnostic as to the timing of when a serious China bust might come, nor does he have specific ideas as to what might trigger a downturn. He just believes it's coming. One possibility -- reflected by a steep stock market decline on Nov. 12 -- is that accelerating inflation may force China's central bank to tighten credit more quickly than expected, putting additional pressure on real estate developers.
I tell him toward the end of an interview that I, too, am invested in China, that in fact I'm long real estate. My wife and I bought a modest house in suburban Shanghai a few years ago, and, on paper anyway, we've done pretty well. Similar houses in our area have sold for considerably more than what we paid. He smiles and says, "Well, good luck with that."
In truth, I am still, relatively speaking, a China bull. But I live near the Rose and Ginko Valley development, and even before meeting Chanos, I must admit, each time I drove by it at night, I secretly wished I would see a few lights on. I still do -- now more than ever.
dit past hier ook goed bij:quote:Op maandag 6 december 2010 23:53 schreef tjoptjop het volgende:
Ik las vandaag een leuk stukje over Jim Chanos in Fortune magazine. Gelukkig ook (aangepast) online te lezen
[..]
http://finance.fortune.cnn.com/2010/11/17/chanos-vs-china/
http://historysquared.com(...)or-wears-no-clothes/
1/10 Van de rappers dankt zijn bestaan in Amerika aan de Nederlanders die zijn voorouders met een cruiseschip uit hun hongerige landen ophaalde om te werken op prachtige plantages.
"Oorlog is de overtreffende trap van concurrentie."
"Oorlog is de overtreffende trap van concurrentie."
zou me niks verbazen want nu wordt de VS langzaam maar zeker als een leugenachtig land ontmaskert die zelfs zijn bondgenoten jarenlang heeft voorgelogen en beduvelt voor eigen gewin, en nu zich als een verongelijkte opstelt.quote:
Zoiets zouden de amerikanen zien als een directe oorlogsdreiging.
..................
Yvonne schreef op maandag 31 oktober 2011 @
13:59:43 in DEF SC #282 aan AchJa & Co
Vanaf hier en nu stopt het in DEF én op FOK!
Ik wil hier een normale SC zonder gebitch!
13:59:43 in DEF SC #282 aan AchJa & Co
Vanaf hier en nu stopt het in DEF én op FOK!
Ik wil hier een normale SC zonder gebitch!
Het heeft echt bizarre vormen aangenomen. Zeker als je het ook nog eens vergelijkt met bekende huizenbubbels als Japan jaren 90 en VS recentelijk. Dat kannatuurlijk niet goed gaan.quote:
[..]
dit past hier ook goed bij:
http://historysquared.com(...)or-wears-no-clothes/
Ben benieuwd wie er straks voor het vuurpeleton moeten verschijnen
Bijzonder interessant stuk idd. Zitten er nog fokkers in China die dit soort verhalen first hand kunnen bevestigen?quote:
http://finance.fortune.cnn.com/2010/11/17/chanos-vs-china/
Please Move The Deer Crossing Sign
Genoeg foto's en filmpjes van die spooksteden te vinden in elk geval.quote:
[..]
Bijzonder interessant stuk idd. Zitten er nog fokkers in China die dit soort verhalen first hand kunnen bevestigen?
Ik kan me zo 123 ook nog herinneren dat er een topic hier was over het grootste winkelcentrum ter wereld...... leeg
preciesquote:
Indd.. als ze hun marktpositie kwijtraken en verovereren ze het maar weer terug met nuke's. Zijn net kleine kinderen op de basisschool die de baas willen blijven
en met Wikileaks wordt dat andermaal onderschreven hoe hypocriet die yanks eigenlijk zijn. 
Yvonne schreef op maandag 31 oktober 2011 @
13:59:43 in DEF SC #282 aan AchJa & Co
Vanaf hier en nu stopt het in DEF én op FOK!
Ik wil hier een normale SC zonder gebitch!
13:59:43 in DEF SC #282 aan AchJa & Co
Vanaf hier en nu stopt het in DEF én op FOK!
Ik wil hier een normale SC zonder gebitch!
quote:Op woensdag 8 december 2010 14:49 schreef rubje het volgende:
[..]
precies
Je denkt dat Chinezen anders zijn??
idd die naieviteit. Ik denk dat de Chinezen nog wel erger zijn. Hoeven immers geen verantwoording af te leggen.quote:
[..]
Outlook 2011 & the Next Decade: China, Is The Smart Money Right?
By Dian L. Chu, EconForecast
China has been ranked as the top growing country among the G20 since 2001 and is expected to retain that title for at least another five years (See Growth Chart). However, the news coming out of China for the past three months has not been good. It is looking more and more that it is not a question of if China is a bubble and going to burst, but when.
The country has major infrastructure issues, troubling population dynamics, poorly aligned employment outcomes, inflation problems, a real estate bubble, an opaque and potentially insolvent banking system (had mark-to-market accounting been applied), geo-political problems with North Korea and Taiwan, and an underperforming stock market in 2010 (see stock comparison chart).
Smart Money Rushing Out
While the hot money is flooding into China, the smart local money is doing everything they can to get their money outside of China, which partly explains why Shanghai SE Composite has underperformed other markets for the past year or so (see Comparison Chart).
The many issues of China could conspire to become the biggest train wreck waiting to happen, and potentially dwarf any little budget problems in Europe by a factor of ten.
Big Trouble In Big China
China has a population related societal structural problem. The nation has tried to utilize the vast manpower to its advantage over the last two decades building a powerhouse manufacturing economy through the availability of low cost workers, which supplied the world with lower cost goods.
Nevertheless, the harsh reality is that the nation's infrastructure, quality jobs, food, and overall resources are too scarce to support such mass population, while achieving the government`s goal of a smooth transition to a developed middle class to sustain an internal demand model going forward.
If you think having riots in Greece over the pension retirement age being raised is bad, just wait till riots breaking out in Beijing and other cities over a 90 cent bowl of noodle soup now costing four dollars due to food shortages, and a runaway inflation problem.
Loose Lending = Non-performing Projects
This is only reinforced by some of the news events taking place over the last three months. Let`s start with the raising of banks reserve requirements by the central bank, which is the sixth such increase in 2010.
These measures are meant to curb the excess lending which has fueled much of the overbuilding and real estate speculation occurred over the past two years as China`s central bank initially wanted to avert a recession by artificially creating demand for workers and construction projects to replace lagging demand from the developed economies.
The problem is that too much lending has occurred, and bad lending at that. Because of the cheap available credit, now you have cement companies and manufacturing firms getting bank loans to invest in endeavors such as real estate, which is outside of their core expertise and competency.
Real Estate Misery Loves Company – China & Spain
The result is a bunch of excess inventory and poorly thought-out construction projects which have no means of recouping the initial investment needed to repay the bank loans.
This practice is similar to Spain`s situation now where they have entire uninhabited building complexes that have yet to be marked to market, and will probably ultimately be demolished. But at least in Spain, even though it was a construction boom, it was engineered by developers in Spain, and not by some manufacturing outfits like those in China.
So, multiply the bad business project factor by ten and you get an understanding of the magnitude of bad loans on the books of Chinese banks. The problem is being further exacerbated by the practice similar to Spain`s of banks making additional loans to the businesses just so that they can then turnaround and pay back the interest owed on the original loans.
The only way this would work out is if these projects magically develop revenue streams. Unfortunately, in the case of Spain, a 20% unemployment rate, coupled with a still overvalued housing market in which prices still need to come down significantly, would suggest that by the time the Spanish economy recovers enough to support the excess inventory, the abandoned projects are run down and uninhabitable.
A similar scenario could play out in China as well.
True Smart Money Wary of the Write-off Domino
Furthermore, China`s practice of overbuilding at the height of real estate valuations makes even haircuts on loan write-offs an untenable practice for banks, and by further throwing good money after bad, the ultimate mark- to-market effect could be catastrophic for Chinese Banks.
This is the main reason all the major Chinese banks have gone to the market in 2010 to raise more capital before investors wise up to the underlying deficits these banks face, as these bad loans eventually would need to be written off the books.
Victor Shih, a Northwestern University professor estimates that Chinese local governments borrowed some 11.4 trillion renminbi at the end of 2009, and that local government financing loans to be roughly one-third of China's 2009 GDP.
Shih reckons the most likely scenario over the next few years is that there would be increases of non-performing loans ratio from local governments. This would require a large scale of recapitalization of the Chinese banking system, which would eat up a large share of China's foreign exchange reserves and possibly slow down growth.
I do believe Beijing is quite capable of a few bailouts and surviving a widespread banking crisis, but this most definitely will not bode well for the financial markets. That's most likely why you see insiders removing capital from direct exposure to the inevitable re-pricing that will happen throughout Chinese markets from real estate to the stock market.
This can be seen at this early stage by the underperformance of the Chinese stock market compared to other global markets. Remember, foreigners cannot invest directly in these markets, so these capital outflows are truly the smart money.
Logistic Gridlock Crimping the Middle Class
Next let`s look at the recent news regarding a severe cutback in automobile registrations in Beijing to 240,000 in 2011 from 700,000 registered in 2010 by the municipal government. Other large cities in China are bound to follow. This is most likely related to the reported 9-day traffic jam on the Beijing-Tibet expressway in August, and other extended traffic jams throughout China in 2010.
China is trying to build infrastructure projects after the fact; whereas with proper central planning these should have been established far ahead of the massive transition from a rural, agricultural based populous to that of a modern, large city based business and manufacturing concentration.
Simply put, it is impossible for all the Chinese citizens who want and can afford automobiles to be able to own and utilize this form of transport without a total breakdown in the transportation system. We are seeing the early stages of complete and counterproductive gridlock in the transportation system of China, and it is only going to get worse over the next decade.
No Jobs for College Grads
For all the talk about how China graduates more engineers each year, and other college educated young people who have strong backgrounds in the hard sciences than most developed nations combined, this is actually another sign of problems to come over the next decade in China.
China`s wealth and emergence into the second largest business economy hasn`t been built around the need for these types of mind and skill set. So literally you have a large mismatch between the types of available jobs in China, that are supported by the heavy manufacturing and construction intensive focus of the past twenty years, to that of the recently educated pool of graduates who have grown in sizable numbers over the past five years.
The Mind Is A Terrible Thing To Waste
This results in a large human asset class that China is currently wasting, as most of the newly educated workforce is working in jobs which require little or no advanced education at the university level. So you have highly educated university graduates in areas like engineering and accounting working low level service and sales jobs that pay less than many manufacturing jobs.
In short, there are too many highly educated Chinese citizens graduating each year for the number of jobs available needing their skill set because China`s economic model isn`t built around these type of jobs. This type of misaligned employment outcomes never ends well; it usually manifests itself in increased civil and social unrest.
8% Inflation in 2011
The next major challenge for China is a skyrocketing inflation, which at its root is the fact that there are too many people chasing too few resources. This fundamental flaw in population dynamics underpins many of the problems that China faces going forward.
Recent CPI data for November illustrates the inflation problem in China with a reading of 5.1% from a year ago comparison, this is up from a 4.4% reading for the previous month. Couple this with the latest 4% hike in fuel prices in China because of rising oil prices, you could expect future CPI and PPI reports to reflect even higher rates of inflation.
For now, most of the year over year spike has revolved around higher food prices as energy has mainly been flat for 2010 thanks mostly to government subsidies. Now that energy prices have entered the picture, China will start to experience even more inflation pressures in 2011.
Furthermore, with the undervalued yuan pegged to the dollar, it is only getting worse for China in 2011 due to Fed's QE2 pressures on the dollar. The real inflation rate for Chinese citizens for 2011 will probably approach 8% next year.
An Asian Contagion by China?
This escalating inflation concern is further compounded by Beijing's lack of decisive action to combat the problem by delaying a much needed currency appreciation, and hiking interest rates in a timely fashion. There is no getting around the fact that these two things need to occur as soon as possible.
By the time the Chinese government is forced to implement these tightening tools, the damage to the economy is most likely already done. The longer China delays the inevitable serious tightening measures, the harder the economic crash that will occur in the aftermath of these policy changes. And it is unlikely to end well. The resultant impact will probably take the rest of the Asian economies down with it – an Asian Contagion scenario.
History Repeats Itself
Eventually central planners and finance ministers around the world might start to understand that policies which lead to bubbles being formed in the first place are counterproductive in the long run. But until that lesson is learned, it seems like we are doomed to repeat the same mistakes over and over again.
Right now, there are more and more signs coming out of China that all is not well with its economy, and the likelihood of a more severe downturn in the future is a distinct possibility, unless its policy makers take decisive and prudent actions to minimize the damage of a hard landing.
By Dian L. Chu, EconForecast
China has been ranked as the top growing country among the G20 since 2001 and is expected to retain that title for at least another five years (See Growth Chart). However, the news coming out of China for the past three months has not been good. It is looking more and more that it is not a question of if China is a bubble and going to burst, but when.
The country has major infrastructure issues, troubling population dynamics, poorly aligned employment outcomes, inflation problems, a real estate bubble, an opaque and potentially insolvent banking system (had mark-to-market accounting been applied), geo-political problems with North Korea and Taiwan, and an underperforming stock market in 2010 (see stock comparison chart).
Smart Money Rushing Out
While the hot money is flooding into China, the smart local money is doing everything they can to get their money outside of China, which partly explains why Shanghai SE Composite has underperformed other markets for the past year or so (see Comparison Chart).
The many issues of China could conspire to become the biggest train wreck waiting to happen, and potentially dwarf any little budget problems in Europe by a factor of ten.
Big Trouble In Big China
China has a population related societal structural problem. The nation has tried to utilize the vast manpower to its advantage over the last two decades building a powerhouse manufacturing economy through the availability of low cost workers, which supplied the world with lower cost goods.
Nevertheless, the harsh reality is that the nation's infrastructure, quality jobs, food, and overall resources are too scarce to support such mass population, while achieving the government`s goal of a smooth transition to a developed middle class to sustain an internal demand model going forward.
If you think having riots in Greece over the pension retirement age being raised is bad, just wait till riots breaking out in Beijing and other cities over a 90 cent bowl of noodle soup now costing four dollars due to food shortages, and a runaway inflation problem.
Loose Lending = Non-performing Projects
This is only reinforced by some of the news events taking place over the last three months. Let`s start with the raising of banks reserve requirements by the central bank, which is the sixth such increase in 2010.
These measures are meant to curb the excess lending which has fueled much of the overbuilding and real estate speculation occurred over the past two years as China`s central bank initially wanted to avert a recession by artificially creating demand for workers and construction projects to replace lagging demand from the developed economies.
The problem is that too much lending has occurred, and bad lending at that. Because of the cheap available credit, now you have cement companies and manufacturing firms getting bank loans to invest in endeavors such as real estate, which is outside of their core expertise and competency.
Real Estate Misery Loves Company – China & Spain
The result is a bunch of excess inventory and poorly thought-out construction projects which have no means of recouping the initial investment needed to repay the bank loans.
This practice is similar to Spain`s situation now where they have entire uninhabited building complexes that have yet to be marked to market, and will probably ultimately be demolished. But at least in Spain, even though it was a construction boom, it was engineered by developers in Spain, and not by some manufacturing outfits like those in China.
So, multiply the bad business project factor by ten and you get an understanding of the magnitude of bad loans on the books of Chinese banks. The problem is being further exacerbated by the practice similar to Spain`s of banks making additional loans to the businesses just so that they can then turnaround and pay back the interest owed on the original loans.
The only way this would work out is if these projects magically develop revenue streams. Unfortunately, in the case of Spain, a 20% unemployment rate, coupled with a still overvalued housing market in which prices still need to come down significantly, would suggest that by the time the Spanish economy recovers enough to support the excess inventory, the abandoned projects are run down and uninhabitable.
A similar scenario could play out in China as well.
True Smart Money Wary of the Write-off Domino
Furthermore, China`s practice of overbuilding at the height of real estate valuations makes even haircuts on loan write-offs an untenable practice for banks, and by further throwing good money after bad, the ultimate mark- to-market effect could be catastrophic for Chinese Banks.
This is the main reason all the major Chinese banks have gone to the market in 2010 to raise more capital before investors wise up to the underlying deficits these banks face, as these bad loans eventually would need to be written off the books.
Victor Shih, a Northwestern University professor estimates that Chinese local governments borrowed some 11.4 trillion renminbi at the end of 2009, and that local government financing loans to be roughly one-third of China's 2009 GDP.
Shih reckons the most likely scenario over the next few years is that there would be increases of non-performing loans ratio from local governments. This would require a large scale of recapitalization of the Chinese banking system, which would eat up a large share of China's foreign exchange reserves and possibly slow down growth.
I do believe Beijing is quite capable of a few bailouts and surviving a widespread banking crisis, but this most definitely will not bode well for the financial markets. That's most likely why you see insiders removing capital from direct exposure to the inevitable re-pricing that will happen throughout Chinese markets from real estate to the stock market.
This can be seen at this early stage by the underperformance of the Chinese stock market compared to other global markets. Remember, foreigners cannot invest directly in these markets, so these capital outflows are truly the smart money.
Logistic Gridlock Crimping the Middle Class
Next let`s look at the recent news regarding a severe cutback in automobile registrations in Beijing to 240,000 in 2011 from 700,000 registered in 2010 by the municipal government. Other large cities in China are bound to follow. This is most likely related to the reported 9-day traffic jam on the Beijing-Tibet expressway in August, and other extended traffic jams throughout China in 2010.
China is trying to build infrastructure projects after the fact; whereas with proper central planning these should have been established far ahead of the massive transition from a rural, agricultural based populous to that of a modern, large city based business and manufacturing concentration.
Simply put, it is impossible for all the Chinese citizens who want and can afford automobiles to be able to own and utilize this form of transport without a total breakdown in the transportation system. We are seeing the early stages of complete and counterproductive gridlock in the transportation system of China, and it is only going to get worse over the next decade.
No Jobs for College Grads
For all the talk about how China graduates more engineers each year, and other college educated young people who have strong backgrounds in the hard sciences than most developed nations combined, this is actually another sign of problems to come over the next decade in China.
China`s wealth and emergence into the second largest business economy hasn`t been built around the need for these types of mind and skill set. So literally you have a large mismatch between the types of available jobs in China, that are supported by the heavy manufacturing and construction intensive focus of the past twenty years, to that of the recently educated pool of graduates who have grown in sizable numbers over the past five years.
The Mind Is A Terrible Thing To Waste
This results in a large human asset class that China is currently wasting, as most of the newly educated workforce is working in jobs which require little or no advanced education at the university level. So you have highly educated university graduates in areas like engineering and accounting working low level service and sales jobs that pay less than many manufacturing jobs.
In short, there are too many highly educated Chinese citizens graduating each year for the number of jobs available needing their skill set because China`s economic model isn`t built around these type of jobs. This type of misaligned employment outcomes never ends well; it usually manifests itself in increased civil and social unrest.
8% Inflation in 2011
The next major challenge for China is a skyrocketing inflation, which at its root is the fact that there are too many people chasing too few resources. This fundamental flaw in population dynamics underpins many of the problems that China faces going forward.
Recent CPI data for November illustrates the inflation problem in China with a reading of 5.1% from a year ago comparison, this is up from a 4.4% reading for the previous month. Couple this with the latest 4% hike in fuel prices in China because of rising oil prices, you could expect future CPI and PPI reports to reflect even higher rates of inflation.
For now, most of the year over year spike has revolved around higher food prices as energy has mainly been flat for 2010 thanks mostly to government subsidies. Now that energy prices have entered the picture, China will start to experience even more inflation pressures in 2011.
Furthermore, with the undervalued yuan pegged to the dollar, it is only getting worse for China in 2011 due to Fed's QE2 pressures on the dollar. The real inflation rate for Chinese citizens for 2011 will probably approach 8% next year.
An Asian Contagion by China?
This escalating inflation concern is further compounded by Beijing's lack of decisive action to combat the problem by delaying a much needed currency appreciation, and hiking interest rates in a timely fashion. There is no getting around the fact that these two things need to occur as soon as possible.
By the time the Chinese government is forced to implement these tightening tools, the damage to the economy is most likely already done. The longer China delays the inevitable serious tightening measures, the harder the economic crash that will occur in the aftermath of these policy changes. And it is unlikely to end well. The resultant impact will probably take the rest of the Asian economies down with it – an Asian Contagion scenario.
History Repeats Itself
Eventually central planners and finance ministers around the world might start to understand that policies which lead to bubbles being formed in the first place are counterproductive in the long run. But until that lesson is learned, it seems like we are doomed to repeat the same mistakes over and over again.
Right now, there are more and more signs coming out of China that all is not well with its economy, and the likelihood of a more severe downturn in the future is a distinct possibility, unless its policy makers take decisive and prudent actions to minimize the damage of a hard landing.
Escaping from a liquidity trap may be impossible, much like light trapped in a black hole.
Op zaterdag 19 november 2011 13:27 schreef Perrin het volgende: En net als van voetbal, heeft iedereen verstand van macro-economie
Op zaterdag 19 november 2011 13:27 schreef Perrin het volgende: En net als van voetbal, heeft iedereen verstand van macro-economie
Ze verhogen de rente ook, dat kan nog interessant worden. 
Escaping from a liquidity trap may be impossible, much like light trapped in a black hole.
Op zaterdag 19 november 2011 13:27 schreef Perrin het volgende: En net als van voetbal, heeft iedereen verstand van macro-economie
Op zaterdag 19 november 2011 13:27 schreef Perrin het volgende: En net als van voetbal, heeft iedereen verstand van macro-economie
Ik kwam ergens deze link tegen, iemand die actief geweest is met google earth en lege chinese steden heeft gezocht.
http://www.businessinside(...)ities-2010-12?slop=1
http://www.businessinside(...)ities-2010-12?slop=1
Tsja, de overheid legt targets op dat de economie jaarlijks 12% ofzo moet groeien en dat kunnen ze alleen maar bereiken door te blijven bouwen. Of je die gebouwen nu nodig hebt of niet.
"If you want to make God laugh, tell him about your plans"
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Daarnaast wil elke provinciebobo het beter doen dan zijn concurrent, dus worden er ook zelf opgelegde targets bovenop die van het centrale planburo gelegd.
Wat tot gevolg heeft dat de ene provincie met de andere concurreert ipv met het buitenland en ze nu bijvoorbeeld enorme overcapaciteit hebben in pc assemblage.
Wat tot gevolg heeft dat de ene provincie met de andere concurreert ipv met het buitenland en ze nu bijvoorbeeld enorme overcapaciteit hebben in pc assemblage.
'Chinese economie riskeert harde landing'
AMSTERDAM - De Chinese economie leunt te veel op investeringen in vastgoed, wat na 2013 'een harde landing kan veroorzaken'.
Foto: NU.nl/Chris Heijmans
Dat stelt econoom Nouriel Roubini, die als een van de weinigen ook de wereldwijde economische crisis wist te voorspellen.
De investeringen in China zijn gestegen tot 50 procent van het bruto binnenlands product. "Dat betekent dat je uiteindelijk twee problemen zult hebben: kredieten die niet functioneren en een enorme overcapaciteit", aldus Roubini zaterdag in Singapore, zo meldt Bloomberg.
Bankencrisis
Eerder berekende kredietbeoordelingsbureau Fitch Ratings al dat China zestig procent kans heeft op een bankencrisis halverwege 2013, als gevolg van de hoeveelheid leningen en stijgende vastgoedprijzen.
Ondanks door de overheid ingestelde prijzenplafonds, hogere kredieteisen voor banken en een beperking van de aankoop van tweede huizen staan de vastgoedprijzen op recordhoogte.
Maatregelen
Volgens Roubini moeten de autoriteiten maatregelen nemen om de prijzen te controleren, de rente verder op te voeren en inflatie tegen te gaan.
"De beleidsuitdaging voor volgend jaar is om de groei van acht tot negen procent te handhaven en de inflatie te verminderen", aldus Roubini. "Na volgend jaar is de grotere uitdaging om investeringen in vaste activa en spaartegoeden te beperken en consumptie te verhogen."
De econoom zei verder dat er bewijs is voor een verdere vertraging van de wereldwijde economische groei en dat de olieprijs kan oplopen tot wel 150 dollar per vat, als de onrust in olieproducerende naties blijft bestaan.
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China is er nog niet..... nog lange niet.
AMSTERDAM - De Chinese economie leunt te veel op investeringen in vastgoed, wat na 2013 'een harde landing kan veroorzaken'.
Foto: NU.nl/Chris Heijmans
Dat stelt econoom Nouriel Roubini, die als een van de weinigen ook de wereldwijde economische crisis wist te voorspellen.
De investeringen in China zijn gestegen tot 50 procent van het bruto binnenlands product. "Dat betekent dat je uiteindelijk twee problemen zult hebben: kredieten die niet functioneren en een enorme overcapaciteit", aldus Roubini zaterdag in Singapore, zo meldt Bloomberg.
Bankencrisis
Eerder berekende kredietbeoordelingsbureau Fitch Ratings al dat China zestig procent kans heeft op een bankencrisis halverwege 2013, als gevolg van de hoeveelheid leningen en stijgende vastgoedprijzen.
Ondanks door de overheid ingestelde prijzenplafonds, hogere kredieteisen voor banken en een beperking van de aankoop van tweede huizen staan de vastgoedprijzen op recordhoogte.
Maatregelen
Volgens Roubini moeten de autoriteiten maatregelen nemen om de prijzen te controleren, de rente verder op te voeren en inflatie tegen te gaan.
"De beleidsuitdaging voor volgend jaar is om de groei van acht tot negen procent te handhaven en de inflatie te verminderen", aldus Roubini. "Na volgend jaar is de grotere uitdaging om investeringen in vaste activa en spaartegoeden te beperken en consumptie te verhogen."
De econoom zei verder dat er bewijs is voor een verdere vertraging van de wereldwijde economische groei en dat de olieprijs kan oplopen tot wel 150 dollar per vat, als de onrust in olieproducerende naties blijft bestaan.
-------------------------------
China is er nog niet..... nog lange niet.
China zal niet zo maar uithalen richting de Amerikaanse dollar en de Verenigde Staten van Noord-Amerika. Alles heeft bij China een dubbele agenda en ik zou,hoe mooi het ook allemaal klinkt,niet teveel op het China concept inzetten want als er iets is wat de afgelopen tientallen jaren wel is gebleken dan is dat de Amerikaanse economie er altijd weer bovenop komt.quote:Op maandag 8 december 2008 08:22 schreef Netstorm het volgende:
Indd.. als ze hun marktpositie kwijtraken en verovereren ze het maar weer terug met nuke's. Zijn net kleine kinderen op de basisschool die de baas willen blijven
Big fat bubble.quote:Moody's: schuld $540 miljard onderschat, gevaar voor Chinese banken
De schuld van lokale overheden ligt 3,5 biljoen yuan, of $540 miljard, hoger dan accountants hadden geschat. Dat kan banken met veel grotere verliezen opzadelen, hetgeen hun ratings in gevaar kan brengen.
Is Wall St. te koop denk je?quote:Op zondag 26 oktober 2008 07:54 schreef LXIV het volgende:
Als China slim is doen ze niet moeilijk maar kopen gewoon Wallstreet op. + de AEX. Daar hebben ze toch veel meer aan!
Je kan je ook afvragen of je wel boos moet zijn...quote:
Heb het eerste artilel gelezen, op zich wel bekend maar toch de moeite waard van het lezen
[..]
dit wist ik niet en verbaasd me dan ook.
Je kan je afvragen op wie je boos moet zijn: op de USA omdat ze slim gebruik maken van hun dollar. Of de sukkels die slaafs achter die dollar aan blijven lopen. Geef de amerikanen eens ongelijk.
Dat de Chinese munt niet internationaal verhandelbaar is heeft trouwens een goede reden.
Jij denkt dat goud ook uit een printer komt?quote:
[..]
en goud is maar goud. Niets anders dan papiergeld eigenlijk.
Je zou je kunnen afvragen of dat dan 'wetenschap' was...quote:
[..]
Wel leuk om te zien, dat je dit nu zegt, ik kan me je strategieen van maanden geleden nog herinneren dat bij een S&P van 1000 of was het 900 een goed instap moment zou zijn met de wetenschap die we toen hadden.
Dat speelt zeker mee. Eigenlijk een soort Marschall-plan II.quote:
[..]
Chinezen doorgronden is een kunst op zich. Ik kan wel een gokje wagen.
Het doet me denken aan een verdeel en heers politiek. China krijgt op deze manier voet aan de grond in Europa (De Atheense haven is niet zo ver van het olierijke middenoosten), zet de Europese Unie met al hun voorwaarden te kakken, en trekt ook nog een kleine lange neus naar Amerika als redder van een natie uit het kamp van de US.
Daarnaast vind China de Amerikaanse hegemonie in de financiële markten via de dollar niet zo prettig, en de euro biedt een mooi alternatief als handelsmunt.
(Collapse van de dollar zonder alternatief zou instorting van de wereldhandel betekenen, vandaar dat de dollar vroeger zoveel gesteund werd.)
Een bubble in China omdat een Amerikaans rating-bureau dat zegt...quote:
Je kan je afvragen hoe waardevol (en objectief) de praatjes van Moody's eigenlijk zijn.
Als je de tekst had gelezen werd je duidelijk dat de lokale Chinese overheid de laatste jaren een schuld van 2,2 triljoen dollar heeft opgebouwd! En dat is waarschijnlijk nog meer door boekhoudkundige regels! Dat Moodys dat rapporteerd doet er niet toe.quote:
Een bubble in China omdat een Amerikaans rating-bureau dat zegt...
Je kan je afvragen hoe waardevol (en objectief) de praatjes van Moody's eigenlijk zijn.
De Chinese overheid stuurt hier natuurlijk op aan om een bepaalde economische groei te behouden. Je kunt je vraagtekens zetten hoe veel van die groei duurzaam is en welke gevolgen het heeft voor de toekomst. Naast die schuldenexplosie zijn er meer onevenwichtigheden in de Chinese economie te vinden (o.a. in dit topic genoemd), die nooit duurzaam kunnen zijn en toekomstige gevolgen gaan hebben. Een big fat bubble als je het mij vraagt.
Hoe investeert een Chinees staatsbedrijf (in dit geval een pharmaceut die westerse geneesmiddelen kopieert) het geld dat Beijing hem toeschuift?
Nou, bijvoorbeeld door voor zichzelf een hoofdkantoor uit marmer en goud te bouwen waar Versailles bij verbleekt:
http://chovanec.wordpress.com/2011/09/09/apres-nous-le-deluge/
Nou, bijvoorbeeld door voor zichzelf een hoofdkantoor uit marmer en goud te bouwen waar Versailles bij verbleekt:
http://chovanec.wordpress.com/2011/09/09/apres-nous-le-deluge/
quote:
Hoe investeert een Chinees staatsbedrijf (in dit geval een pharmaceut die westerse geneesmiddelen kopieert) het geld dat Beijing hem toeschuift?
Nou, bijvoorbeeld door voor zichzelf een hoofdkantoor uit marmer en goud te bouwen waar Versailles bij verbleekt:
http://chovanec.wordpress.com/2011/09/09/apres-nous-le-deluge/
Ik ben het ook helemaal eens met die laatste zin:
quote:Personally, it reminds me of the prophetic words attributed to Louis XV, a resident of the original Versailles: ”après nous, le déluge” — or to paraphrase, “when this is over, all hell’s gonna break loose.”
"If you want to make God laugh, tell him about your plans"
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