Politics 'China's financial system could collapse': What the Reserve Bank's Evergrande bombshell means for Australia

[Holden Hillbilly]

An Evergrande collapse is 'likely' without government support, but a bailout has its own problems for China, RBA warns

There are fresh questions about the health of the Chinese property sector and what that means for countries — like Australia — that are heavily dependent on robust Chinese economic growth, writes David Taylor.

www.abc.net.au

 

[Nickoo]

An Evergrande collapse is 'likely' without government support, but a bailout has its own problems for China, RBA warns

There are fresh questions about the health of the Chinese property sector and what that means for countries — like Australia — that are heavily dependent on robust Chinese economic growth, writes David Taylor.

www.abc.net.au

Jeez Chinese hits just keep on coming.


Sent from my iPhone using Tapatalk Pro

 

[Rooboys Rool]

Geez I wish the ABC would stay away from these clickbaity headlines. Seems to be creeping in more and more. Leave that nonsense to the Murdoch's of the world.

 

[Admiral Byng]

This is a real problem, and it has been brewing for a long time. China does not have a "properly" developed financial and regulatory system like we see in most other developed nations. It is a bit of a mess and mired in corruption and politics. The root causes are firstly that regional and city governments are reliant upon revenues from the lease of land to property developers, and secondly the lack of a well regulated and functional financial system means that real estate speculation is the only investment option open to ordinary people. They have had a good run for about the last 30 years where property speculation has actually delivered big returns.

There is a real danger of it all going **** up now, if the CCP do the wrong thing. People have been predicting the China real estate crash for about the last decade, but the can has been kicked down the road.

If there is a crash in China it will end up in a severe recession, a depression even, in that country. Demand for Australian iron ore will collapse if the construction sector collapses. So it will be a bad thing for us too if/when it happens.

 

[Kanga Commando]

This is a real problem, and it has been brewing for a long time. China does not have a "properly" developed financial and regulatory system like we see in most other developed nations. It is a bit of a mess and mired in corruption and politics. The root causes are firstly that regional and city governments are reliant upon revenues from the lease of land to property developers, and secondly the lack of a well regulated and functional financial system means that real estate speculation is the only investment option open to ordinary people. They have had a good run for about the last 30 years where property speculation has actually delivered big returns.

There is a real danger of it all going **** up now, if the CCP do the wrong thing. People have been predicting the China real estate crash for about the last decade, but the can has been kicked down the road.

If there is a crash in China it will end up in a severe recession, a depression even, in that country. Demand for Australian iron ore will collapse if the construction sector collapses. So it will be a bad thing for us too if/when it happens.

There are at least 3 developers that have crossed one or more of the "three red lines", and 3-4 developers currently delinquent on their bonds. I think the first default comes on the 18th ( 30 days after entering delinquency )

Without access to banks ( as denied by the three red lines), the ponzi scheme can't continue. This is going to get a lot worse - for China, and Australia.

 

[Kwality]

This is a real problem, and it has been brewing for a long time. China does not have a "properly" developed financial and regulatory system like we see in most other developed nations. It is a bit of a mess and mired in corruption and politics. The root causes are firstly that regional and city governments are reliant upon revenues from the lease of land to property developers, and secondly the lack of a well regulated and functional financial system means that real estate speculation is the only investment option open to ordinary people. They have had a good run for about the last 30 years where property speculation has actually delivered big returns.

There is a real danger of it all going **** up now, if the CCP do the wrong thing. People have been predicting the China real estate crash for about the last decade, but the can has been kicked down the road.

If there is a crash in China it will end up in a severe recession, a depression even, in that country. Demand for Australian iron ore will collapse if the construction sector collapses. So it will be a bad thing for us too if/when it happens.

The latest domino:https://www.abc.net.au/news/2022-01-03/china-evergrande-shares-halt-detb-crisis/100735938
Evergrande shares in trading halt after China orders demolition of newly built luxury apartments
Chinese media reported that Evergrande had been ordered to demolish 39 luxury apartment buildings on the tropical island of Hainan within 10 days.

The Ocean Flower Island is a luxury project in Hainan.(Supplied)
The Ocean Flower Island project, a mega-resort under development by Evergrande, consists of three reclaimed Islands in Danzhou in Hainan province.

The 39 buildings are located on island number two, which is for residential purposes.

It is estimated the apartments are worth about 7.7 billion yuan ($1.7 billion).

Chinese media reported the planning permit for the apartments was "obtained illegally" and had been "revoked".

Last Thursday, Evergrande's shares tumbled after the developer failed to pay offshore coupons due earlier in the week.

Once a darling of China's booming property sector, Evergrande has more than $400 billion in debts, triggering financial woes in the world's second-biggest economy.

Evergrande chairman Hui Ka Yan vowed in a meeting last month to deliver 39,000 apartments in December, 2021, compared with fewer than 10,000 in each of the previous three months.

Evergrande will face more deadlines in January for both overseas and domestic coupons.

 

[Rob R]

This is a real problem, and it has been brewing for a long time. China does not have a "properly" developed financial and regulatory system like we see in most other developed nations. It is a bit of a mess and mired in corruption and politics. The root causes are firstly that regional and city governments are reliant upon revenues from the lease of land to property developers, and secondly the lack of a well regulated and functional financial system means that real estate speculation is the only investment option open to ordinary people. They have had a good run for about the last 30 years where property speculation has actually delivered big returns.

There is a real danger of it all going **** up now, if the CCP do the wrong thing. People have been predicting the China real estate crash for about the last decade, but the can has been kicked down the road.

If there is a crash in China it will end up in a severe recession, a depression even, in that country. Demand for Australian iron ore will collapse if the construction sector collapses. So it will be a bad thing for us too if/when it happens.

It wont crash, Xi will prop up the economy using whatever actual/fake measures required and take advantage of the opportunity to get rid of some rivals and make himself and his minions richer like he has been doing the last few years and like every dictator does.

On SM-G570F using BigFooty.com mobile app

 

[Green Hammer]

It wont crash, Xi will prop up the economy using whatever actual/fake measures required and take advantage of the opportunity to get rid of some rivals and make himself and his minions richer like he has been doing the last few years and like every dictator does.

On SM-G570F using BigFooty.com mobile app

China Russia Iran moving away from US dollar. China to take presidency of BRICS in 2022. Things are being put into place to bypass western empire

 

[Ned_Flanders]

It wont crash, Xi will prop up the economy using whatever actual/fake measures required and take advantage of the opportunity to get rid of some rivals and make himself and his minions richer like he has been doing the last few years and like every dictator does.

On SM-G570F using BigFooty.com mobile app

That ship has passed when they chose to let Evergrande and Country fall.

There are bigger issues however. Unemployment is on the rise, and this will only increase with building projects being abandoned (more announced this week)

 

[Seeds]

This is a real problem, and it has been brewing for a long time. China does not have a "properly" developed financial and regulatory system like we see in most other developed nations. It is a bit of a mess and mired in corruption and politics. The root causes are firstly that regional and city governments are reliant upon revenues from the lease of land to property developers, and secondly the lack of a well regulated and functional financial system means that real estate speculation is the only investment option open to ordinary people. They have had a good run for about the last 30 years where property speculation has actually delivered big returns.

There is a real danger of it all going **** up now, if the CCP do the wrong thing. People have been predicting the China real estate crash for about the last decade, but the can has been kicked down the road.

If there is a crash in China it will end up in a severe recession, a depression even, in that country. Demand for Australian iron ore will collapse if the construction sector collapses. So it will be a bad thing for us too if/when it happens.

chinas financial system will not collapse.

china is a net exteranl saver. it does not owe money to other countries. Other countries owe money to it.

now their domestic finacial system is very inefficient and there has been a lot of misallocation of funding and there is the signficant potential for individual sectors to suffer financial collapse. But because china has so much net external savings and because the government has so much control over the economy the government can just move wealth around to shore up any domestic weak points. Hell because china has strong capital controls it can prevent domestic residents from selling out of rmb and buying external assets.

it could simply bail out evergrande if it wanted to With little blowback effect for the rmb. It doesnt want to bail them out as it wants to set an example. But it could if it needs to.

the countries who are at threat of major financial collapse are the ones with massive net external debt. Investors could leave in droves if these countries start facing a financial problem. Think turkey, argentina, greece and australia. They are the ones to worry about. Not china.


if interest rates turn australia is in massive problems given our mortgage market As the mortgage debt is mostly owed to foreigners.

 

[Green Hammer]

That ship has passed when they chose to let Evergrande and Country fall.

There are bigger issues however. Unemployment is on the rise, and this will only increase with building projects being abandoned (more announced this week)

China's Excellent, Very Good Year
2021 was China's best year. Ever.

by Godfree Roberts*

Amidst global gloom, 2021 was the best year in modern Chinese history. Here’s what they accomplished:

• Eliminated extreme poverty.
• Reached 96% home ownership.
• Kept Covid death rate at 0.6% of America’s.

bigger

• Grew the economy $2 trillion PPP, the fastest growth ever.
• Became the richest country on earth.
• Became the world’s biggest overseas investor.
• Became the world’s largest movie market.
• Produced nearly one new billionaireand 300 millionaires every workday.
• Completed new train lines in seven countries, including Laos’ first.
• Ran 15,000 cargo trains to and from Europe, up 30% YoY.
• Joined RCEP trade pact, with 30% of global GDP and of the world’s population.
• Sold $140 billion retail online in 24 hours (Amazon’s record is $5 billion).
• Launched the first central bank digital currency.
• Dominated scientific research and issued the most patents of any country.

MoA - China's Excellent, Very Good Year

 

[Ned_Flanders]

China's Excellent, Very Good Year
2021 was China's best year. Ever.

by Godfree Roberts*

Amidst global gloom, 2021 was the best year in modern Chinese history. Here’s what they accomplished:

• Eliminated extreme poverty.
• Reached 96% home ownership.
• Kept Covid death rate at 0.6% of America’s.

bigger

• Grew the economy $2 trillion PPP, the fastest growth ever.
• Became the richest country on earth.
• Became the world’s biggest overseas investor.
• Became the world’s largest movie market.
• Produced nearly one new billionaireand 300 millionaires every workday.
• Completed new train lines in seven countries, including Laos’ first.
• Ran 15,000 cargo trains to and from Europe, up 30% YoY.
• Joined RCEP trade pact, with 30% of global GDP and of the world’s population.
• Sold $140 billion retail online in 24 hours (Amazon’s record is $5 billion).
• Launched the first central bank digital currency.
• Dominated scientific research and issued the most patents of any country.

MoA - China's Excellent, Very Good Year

FFS, if you're gunna pick a troll, pick a good one

1) the govt owns the land in china, noone owns s**t (the 99 year type leases like in parts of London)

2) "fastest" is the wrong descriptor for the $2 trillion growth. it may be the largest, but its not the fastest (which is based upon the speed of growth compared to past levels)

3) largest population = largest movie market, no s**t. its not by value however

4) no s**t train numbers are up on 2020 - china and the EU were both in lockdown

5) comparing a nations singles day spending to amazon alone for black friday isnt a fair comparison - needs to be all USA based online retail

nothing wose than arsehats like this who have some good points to make, but drown it in stupid. the patent one BTW is a big issue, the USA has dominated this metric for decades, and its seen as a sign of innovation and development in an economy