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End of the China bull?

Discussion in 'International Markets' started by Uncle Festivus, Feb 1, 2008.

  1. So_Cynical

    So_Cynical The Contrarian Averager

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    I think it can go on for a long time yet as its not just the Americans buying Chinas exports...its the whole world, so the 14% figure should prob be 21% and then there the massive differences in net worth and income.

    So its more like 40% of the world's population (who are mostly very poor and have nothing) getting richer selling stuff to 21% of the world's population (who have a net worth and income prob 20x the average Chinese person)
    & credit cards.
     
  2. Dowdy

    Dowdy

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    If the China bull ends, commodity prices aren't the only things that will suffer.

    Australian property with suffer too. All these big Chinese companies who bought Aussie property as a place to invest their money will have to liquidate their assets which means a mass selling of Aussie property
     
  3. Trembling Hand

    Trembling Hand Can be found on the bid

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    What exactly do you mean by this? When has a big Chinese company been interested in Australian property?

    Unless it had valuable rocks under it?
     
  4. Dowdy

    Dowdy

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    Claims made by various people including real estate agents that Chinese are coming here buying property, paying them in cash and leaving them empty hoping for capital gain.

    I highly doubt those Chinese are private individual buyers.


    We do the same - Australian companies buy property overseas as a form of investment.
     
  5. Trembling Hand

    Trembling Hand Can be found on the bid

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    Why? there are more millionaires in China than anywhere.

    I don't think a "big Chinese company" would have the slightest interest in a residential property.
     
  6. Dowdy

    Dowdy

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    True, but the result would be the same if the China bull ends. It just won't be a mass selling.

    Why? Aussie companies do the same (only with commercial property) but we're a bit smarter about it, since they actually try to put tenants in them
     
  7. So_Cynical

    So_Cynical The Contrarian Averager

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    The Chinese Govt actually owned (perhaps they still do?) a few of the bigger Chinese restaurants....least that what i read somewhere back in the early 90's
     
  8. Uncle Festivus

    Uncle Festivus

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    Bubble, bubble toil and TROUBLE!

    http://www.time.com/time/magazine/article/0,9171,1971284,00.html#ixzz0kreNQ2sG

    China has become a field of dreams; a build-and-they-will-come economy.

    http://www.smh.com.au/business/the-china-bubble-20100412-s34b.html

    http://www.smartcompany.com.au/economy/20100406-is-china-a-classic-bubble-economy-maley.html
     
  9. Aussiejeff

    Aussiejeff

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    From Bloomberg today.. http://noir.bloomberg.com/apps/news?pid=20601087&sid=aB_mY.uI0NfQ&pos=1

     
  10. drsmith

    drsmith

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  11. drfuzzy

    drfuzzy

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    Interesting chart. I personally feel the China story is too big and too bullish to pop like the tech bubble did almost a decade ago. A billion Chinese people are moving towards a better quality of life and urbanizing. The demand for a better quality of life is too great to see China falter now.
     
  12. baby_swallow

    baby_swallow

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    The Chinese (ie.The Govt) been divesting their US dollars into global companies - mining, food, real estates, and yes - including residentials by way of proxies. They are the worlds largest holder of USA debts. They fear that one day the US dollar will tank.
     
  13. Garpal Gumnut

    Garpal Gumnut

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    I must admit some bias, in that I only read the WSJ for information on China, I find it the most comprehensive.

    I have never visited mainland China.

    It appears to me that it is a complex centrally controlled economy, with ambitious leaders, and a so far compliant population with great differentials in wealth.

    As long as the cadres can keep control China will continue to steal assets in the way of patents on machinery, IT and infrastructure, until it becomes the dominant world economy.

    Who knows whether the bull has ended.

    Ask the Central Committee, after the next meeting.

    gg
     
  14. drsmith

    drsmith

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  15. sinner

    sinner

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    There was a foreign correspondent episode on ABC iView (unfortunately no longer online) about the China property bubble. It interviewed Michael Pettis heavily and that Inner Mongolian bubbletown was also visited.

    Eery place.

    I think the fact that nobody seems to care about lines like this
    shows huge complacency in the market. 13.6 trillion yuan, if anyone was curious, also roughly equals to the amount of USD held by the Chinese (2 trillion) as reserves. The PBoC has painted themselves into a corner on this one it seems, they told the banks to lend and lend they did now they told the banks to stop lending and stop they did except how can you cut 30% of lending that is bigger than your neighbouring countries economies combined without some sort of fiscal impact!

    If it pops it will be another one that "nobody could have seen coming" or a "six sigma event" whatever people like to claim when they are ignoring the reality of the situation.
     
  16. Uncle Festivus

    Uncle Festivus

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    Just seems to me like they are making the same mistakes that the rest of the world has made with regards to paper IOU's - overproduction. China could be the next catalyst for GFC II, only the rest of the world will be starting this one from a base far worse than GFC I. Ah well, back to the bunker.....;)
     
  17. sinner

    sinner

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    More on Chinese ghost towns:
    http://blogs.worldbank.org/transport/node/526

    (from the perspective of a World Bank transport analyst)

     
  18. Timmy

    Timmy white swans need love too

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    I suppose a town is a physical "network effect" in action:
    So, given towns such as these are
    it is really not too surprising they are slow to populate.

    Also:
     
  19. sinner

    sinner

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    Hi Timmy, I agree with the premise of network effect but you can see in the article it states that usually they get Government facilities to move in first which spurs demand but in this case the Government workers would prefer to commute rather than move (anecdotal quote from the article).

    Kangbashi is an example of a town where network effect did not materialise even after three years. Their train lines are already completed I believe. Government workers prefer to commute rather than move, there, too.

    In any case, I didn't post the article to make a bearish point or anything, just to increase coverage on the topic, especially since I had not heard about Chenggong, I thought others might be interested in the phenomena.
     
  20. Timmy

    Timmy white swans need love too

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    Tks sinner - was an interesting article. Must admit I don't know much about urban development in China (or enough about China at all) - found this series of articles useful though:

    The Nine Nations of China
    http://chovanec.wordpress.com/2009/11/16/the-nine-nations-of-china/

     
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