Beijing wanted to cool its housing market, but created a bigger problem, as the fallout from debt-laden developers and sinking sales spreads to the broader economy.
A model Chinese property developer in a sector replete with risk takers is teetering on the edge of default. Short of cash, one of China’s biggest asset managers has missed payments to investors. And billions of dollars have flowed out of the country’s stock markets.
In China, August has been a dizzying ride.
What started three years ago as a crackdown on risky business behavior by home builders, and then an ensuing housing slowdown, has spiraled rapidly this month. The broader economy has been threatened, and the confidence of consumers, businesses and investors undermined. So far, China’s typically hands-on policymakers have done little to ease anxieties and seem determined to reduce the country’s economic reliance on real estate.
This is many decades in the making. From useless infrastructure projects, to artificially deflating the yuan, to rampant IP theft, to making CEOs disappear, to destroying the entire IT sector, to fake economic figures, to crazy regional incentive models, to major corruption, to very restrictive foreign capital rules, and one of the worst looming demographic crises in the entire world. They’re so racist and xenophobic they’ll never be able to plug the gap with immigration either. Xi is reversing decades of Deng’s economic reforms, and looks set to return China to Mao’s policies. We have history to inform us of the likely outcome.
The good news for the West is that they’ve done such a good job of building an insular economy that even if all exports to China stopped today, it would barely move the market. Further, if they have a recession or depression, it will cut energy and food prices for us, reducing inflationary pressures. China is not a good world citizen. They pose a material threat to Taiwan, Tibet, millions of Uyghur muslims, and their neighbours. They champion authoritarianism, corruption, violence, and torture as means for power. I will not cry when they are weakened.
and their little removed boy posters on this site are annoying as fuck with their smugness
I agree on all points. Hopefully this government collapses so a Chinese democracy can rise, or at the very least, we don’t repeat the 20th century mistake of exporting all manufacturing to a fascist country for cheap labor.
Well said
Whew, that was a whole lot at once. And like, I get the gist of this but not the impact. Once a certain (very low) bar has been reached, countries are remarkably stable things. Worse disasters have befallen other nations that ended up surviving intact. You have to be super unhappy to want to rock the boat that much. China’s one of the biggest, richest countries in the world. It’ll get bounced around by headwinds but I doubt we’re going to see some crazy democratic revolution - that’s kind of a Western dream, if I could be so bold as to say so.
At the absolute most, I can see Xi and Xi supporters being tossed out via party mechanisms and a new guy taking over. Make a few minor corrections, maybe one big, but a natural equilibrium will return pretty quickly.
Yeah, the Chinese are not exactly unhappy with their leadership. They all profited from the economic rise of the nation. It will take years of economic strain to push people to a revolution.
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News about China is always feast or famine.
On Monday they own all batteries world wide, Tuesday it’s economic apocalypse, Wednesday global domination.
There have been concerns of a real estate crash in China for several years, with different problems than the potential real estate crash that could happen here in the United States.
That being said, China “on the edge” is certainly a title meant to get you to click on the link. Economies wax and wane, after all.
It’s a big complex organism. Some facets will succeed others fail. Headlines will always be exaggerated
Holy shit, now that you mention it, china news is all fascist propaganda.
china news is all fascist propaganda.
China is spending at least ten billion a year pushing Pro China Propaganda.
Want to see something fascinating from back in 2020 that you probably didn’t hear about?
Russian rocket go boom.
Media: it’s a sign of a declining agencyMusky rocket go boom.
Media: rockets are hard
man i never know when or if i can ever trust news about china, or news from china, or anything i hear about china, because there are so many special interests who WANT me to hold one particular opinion or another…
There certainly are parties who would benefit from the world believing this story, after all. Even if the benefit is as minimal as making western or capitalist construction firms look better. It’s practically indirect advertising, making acceptance of high construction costs feel more palatable because “at least it’s not like china” or some shit.
I’ve seen those videos where people are whacking the base of a pristinely painted concrete support pillar with an empty plastic water bottle and watching the material chip, flake, and crumble away like it’s made of loose gray dirt and even then I felt this skin-crawling sensation that I’m being fucked with by SOMEBODY. They claimed it was part of one of those shiny brand new housing towers that ALLEGEDLY don’t even have plumbing, ventilation, or electrical systems installed because the contractors are ALLEGEDLY in it for pure graft and nothing more, but how can I take anything at face value anymore?
Your suspicions are generally correct. News about anything is always carefully selected to fit a narrative.
I have been in those kinds of buildings in China. They’re real. I also have no idea what difference it makes to the average American to know about them.
Those buildings were pretty wild though. As an American, I relate to them this way: a lot of China’s prosperity is recent, within the last couple of decades. You’ll see some of the same stuff in America but with respect to much older achievements that were neglected. Both are the result of local governments falling asleep at the wheel or specific politicians ignoring problems to make themselves look better, at least temporarily. In other words, same shit, different day.
Since this is Lemmy, I guess I should say this isn’t a “both sides” thing. It’s a “this is being human” thing. I suppose the difference between the two is China will censor stuff for civic harmony while US media will blow everything wildly out of proportion to drive rage clicks. So there’s that.
Yeah it’s a lot of guys getting sweetheart contracts from government construction initiatives, then skimping on materials to pocket as much cash as possible. Capitalism/cronyism doing its thing
That’s the thing about a command economy: sometimes you can command it to do the wrong thing.
I’m sure they’ll cut costs by lowering quality. Might be tough to do, but they’ll manage to find a way. Maybe they’ll move towards using more cardboard and wet noodles.
Great.
