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China's imminent financial crisis

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Jizzlebang
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China's imminent financial crisis May. 9th, 2012 @ 04:18 PM Reply

China is on the edge of a financial crisis greater than any other country experienced in 2009. Yes, even bigger than United States', perhaps even Greece.

Irresponsible real estate projects, corruption and hidden debt will halt the massive and fictitious growth China has enjoyed.

China has for many years been engaged in construction and other projects which translates into GDP growth, as the illusion of legitimate investment and growth among the populace. The problem is that the growth is fictitious and the result is Ordos, which you will see in the link, is a massive city without inhabitants. 64,5 million apartments, enough to house 200 million people (2/3s the entire US) are completely empty. Even so another 40 to 50 million more apartments are already planned. All this is possible of course because China does need to listen to a free market, can use and move money where they need it. This is, after all, how China got through the financial crisis. By lending money, through stimulus, to companies and people. Money with rate that are not sustainable. If you gather the Chinese provincial debt, some estimates find Chinese debt to be as high as 160% of their GDP. That's almost twice that of the US. Moreover, the conditions which have allowed China to grow is not sustainable in the economy of what would be worlds richest country. Slave labor and undervalued currency is not going to cut it. My guess is that China will begin its full collapse by the autumn of 2012, shortly after the massive shift in power to the new leaders.

I'll say it again; China's economy is ficitious.

Take that, add it together with the revelations of Bo Xilai, argueably the most popular politicians massive corruption receipt, shows corruption is isolated local incidents. It's far reached in the high tiers of Chinese government.

Forget China as a world power, not in this century anyway.


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Iron-Hampster
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Response to China's imminent financial crisis May. 9th, 2012 @ 08:29 PM Reply

The end of China is also the end of everyone who owes money to china. The money they lent to other countries will have been backed by their fake capita. All of the money they used to buy debt off other countries will also have been backed by their fake capita. They might call back all of their debt when faced with this crisis and trigger hyper inflation in other countries, just like what happened to Europe when America's economy crashed.

So china might have an economic melt down, so will everybody else.


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Korriken
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Response to China's imminent financial crisis May. 10th, 2012 @ 10:18 AM Reply

they build a city with no inhabitants... and only allow 1 child per family.

*shrug* typical human stupidity.


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Camarohusky
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Response to China's imminent financial crisis May. 10th, 2012 @ 11:07 AM Reply

At 5/10/12 10:18 AM, Korriken wrote: they build a city with no inhabitants...

Kinda like Detroit?

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Response to China's imminent financial crisis May. 10th, 2012 @ 11:40 AM Reply

At 5/10/12 11:07 AM, Camarohusky wrote:
Kinda like Detroit?

in the future, probably.


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Saren
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Response to China's imminent financial crisis May. 12th, 2012 @ 09:51 AM Reply

this is good 2 hear they grew 2 big for their own good


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Response to China's imminent financial crisis May. 12th, 2012 @ 11:38 AM Reply

This reminds me of the New South China Mall, which is set in Dongguan rather than Ordos.

This mall was built in 2005, is the world's largest in terms of gross leaseable area, and second in total area to the Dubai Mall. And...it has been 99% vacant since it opened.

Are these things white elephants, or are they pink elephants?


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Kidradd
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Response to China's imminent financial crisis May. 12th, 2012 @ 07:10 PM Reply

At 5/10/12 11:07 AM, Camarohusky wrote:
At 5/10/12 10:18 AM, Korriken wrote: they build a city with no inhabitants...
Kinda like Detroit?

to be fair, detroit had inhabitants, it just fell to decay with white flight, and it was further exacerbated by the 2008 crash. it's really hard to get a grip on the scale we're dealing with when we're talking about china. there are ~160 cities in china with a population over 1 million (take that with a grain of salt, but i doubt the "real" number is drastically lower than that). that number will grow to ~221 in a very short amount of time.
there's only 9 cities in america with over 1 million people (as of 2010 numbers). new york city has a population of ~8.3 million people. shanghai has ~13.4 million. cities like denver and chicago are puny babies compared to over there. there are hundreds of millions of people that live in the countryside that will be moving to urban areas within the next few decades, which is why you see entire sections of cities completely empty. china is literally building entire cities within a span of months to keep up with the people moving in.

Camarohusky
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Response to China's imminent financial crisis May. 12th, 2012 @ 07:26 PM Reply

At 5/12/12 07:10 PM, Kidradd wrote: there's only 9 cities in america with over 1 million people (as of 2010 numbers). new york city has a population of ~8.3 million people. shanghai has ~13.4 million.

You're actually framatically understating this number. Sure only 9 cities proper are over 1 million. The US actually has 37 cities that are over 1 million residents large. Much of American urban areas are made up of the suburbs that technically are indistinguishable from the cities they are next to.

Kidradd
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Response to China's imminent financial crisis May. 12th, 2012 @ 07:33 PM Reply

At 5/12/12 07:26 PM, Camarohusky wrote:
At 5/12/12 07:10 PM, Kidradd wrote: there's only 9 cities in america with over 1 million people (as of 2010 numbers). new york city has a population of ~8.3 million people. shanghai has ~13.4 million.
You're actually framatically understating this number. Sure only 9 cities proper are over 1 million. The US actually has 37 cities that are over 1 million residents large. Much of American urban areas are made up of the suburbs that technically are indistinguishable from the cities they are next to.

you know what, i'll give you that. the new york metro area has somewhere between 22 and 23 million people, that includes parts of CT and NJ. i'm going to assume that way the populations were counted for the city populations in china have pretty generous criteria and include not just the immediate residential districts but probably the broad metro area as well.

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Response to China's imminent financial crisis May. 12th, 2012 @ 08:45 PM Reply

Another fact you missed was that China's population is going to get older than hell. The problem with the "one child policy" is that once most of the current parents get older and older the young will have to support a much larger percentage of the aging population that is unable to work.

Higher percentage of old people and lower percentage of young people is bad, mmmmk.


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orangebomb
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Response to China's imminent financial crisis May. 12th, 2012 @ 11:02 PM Reply

I guess that's what happens when you grow too much, too fast, and get ahead of themselves when they became the de facto factory of the world's goods. I mean, the stories on how shopping malls and large apartment buildings being vacant and even abandoned just a few months after they opened is pretty eye-opening, not to mention the usual story of sub-standard construction of roads and sidewalks in the less developed regions, and legions of knock-off products that they make every year.

As Cootie mentioned, the working population of China is going to grow old pretty soon, and considering the rather draconian "one child policy" in China, {whether or not it's fully enforced is questionable} their are going to be a lot less young people who will replace the older generation in the factories and businesses, which is not good, especially when new businesses, apartments and factories are being built at the drop of a hat.


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Itachi888Uchiha
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Response to China's imminent financial crisis May. 13th, 2012 @ 12:00 AM Reply

At 5/12/12 08:45 PM, Cootie wrote: Higher percentage of old people and lower percentage of young people is bad, mmmmk.

Does China have social security? If so they could just get rid of it...I know that sounds lame but what are they gonna do?


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Lugen
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Response to China's imminent financial crisis May. 14th, 2012 @ 12:34 AM Reply

So that's why they insist to take the island near Philippines where it really isn't theirs to begin with.


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Response to China's imminent financial crisis May. 16th, 2012 @ 12:35 AM Reply

China should eliminate some of their armed forces. That would help them save some money.


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Jizzlebang
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Response to China's imminent financial crisis May. 16th, 2012 @ 06:36 AM Reply

At 5/16/12 12:35 AM, DoctorStrongbad wrote: China should eliminate some of their armed forces. That would help them save some money.

This is beyond saving a couple billion. A large chunk of their economy is based on what looks good right here and now. Their working towards the quarterly reports, ensuring strong growth, albeit short term.


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Camarohusky
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Response to China's imminent financial crisis May. 16th, 2012 @ 10:37 AM Reply

At 5/16/12 06:36 AM, Jizzlebang wrote: This is beyond saving a couple billion. A large chunk of their economy is based on what looks good right here and now. Their working towards the quarterly reports, ensuring strong growth, albeit short term.

Anyone who knows anything economically (which strangely leaves out the "economists") knows, and has known for a while, that China's growth is a crock of shit.

Ericho
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Response to China's imminent financial crisis May. 16th, 2012 @ 11:01 AM Reply

The national debt in Greece (I think it was Greece) isn't that bad because it's actually less per person than it is for the United States. In the USA, the debt is like $35,000 per person, while in Greece, it's around $30,000 per person. I would like to hear what the debt is for China in terms of how much it is per person. With their high population, I imagine it can't be THAT bad. Anyway, I guess China is going to start borrowing money from us, huh?


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Jizzlebang
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Response to China's imminent financial crisis May. 16th, 2012 @ 01:21 PM Reply

At 5/16/12 11:01 AM, Ericho wrote: The national debt in Greece (I think it was Greece) isn't that bad because it's actually less per person than it is for the United States. In the USA, the debt is like $35,000 per person, while in Greece, it's around $30,000 per person. I would like to hear what the debt is for China in terms of how much it is per person. With their high population, I imagine it can't be THAT bad.

GDP per capita in the US is twice that of Greece. If you want to look at it per person, meaning it would be that much more difficult to pay off that debt. China's GDP per capita is a fifth of the US. Meaning a potential 160% debt of GDP would be THAT bad.


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