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China’s economy is on the verge of collapse?
Nov 10, 2011 01:34
guestBOB Voting without time limit
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The housing prices in big cities have fallen. In some areas, it has fallen by 10 to 20 percents. The people who bought the apartments require the real estate developers to give their money back. In Wenzhou, many small and medium sized enterprises have gone bankrupt. The investors from Wenzhou who invests in real estate begin to sell their houses at lower prices, hoping they won’t lose too much money.

No doubt, there is a huge bubble in China’s real estate market. Chinese government has taken severe policies to control the housing prices, ensuring that China’s economy won’t be heavily affected when the bubble breaks.

Do you think China can maintain its economic growth and avoid the collapse even if the real estate market crashes?
Nov 11, 2011 17:11
#1  
GUEST12578 China's real estate market is going to have an adjustment or correction, but will not collapse. Why?
1. Unemployment is relatively low and people will continue to buy homes. On the other hand the supply of aprtments is tight.
2. Strong demand for housing. This strong demand will continue for many years, due to the massive migration into large metropolitans in the near future.
3. Government intervention in controlling speculation in R.E. by limiting the number of apartments an individual can purchase.

As far the economic growth, there are two parts here: domestic and international. If the international demand for Chinese goods relaxes, you may not see any rapid growth. This slow demand will indirectly affect unemployment and therefore domestic demand as well. Just don't cry for China, yet.
Nov 27, 2011 01:41
#2  
  • BOBERT
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The entire world is facing recession, or worse. China will not be immune. With export markets in Europe and USA drying up China will suffer more than most. If you have any doubts just look at the relative falls in world stock markets so far this year. The Hang Seng is down 25%. So is the Shanghai Composite Index. The Dow Jones is down just 2%. So what's that telling you about the future?
Nov 28, 2011 04:32
#3  
  • ZABOLSH
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No I dont believe that China' economy is on the verge of collapse. Not at least in the Greek or Italian style scenario. China has the world's largest gold reserves and with this is tending to prop up the US economy. It also has almost the largest number of dollar billionires, with the number going up all the time. However this doesnt mean that to some extent, that China is going aong without problems. Its workforce is unsettled and struggling for a better life. An interesting book I read recenty was from a Russian viewpoint obtainable via Lulu self publishing entitled Modern China by A.A. Mayevsky in English language. It gives an interesting assessment of the general state of the Chinese economy.
Nov 28, 2011 13:27
#4  
  • BOBERT
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Quote:

Originally Posted by ZABOLSH

No I China has the world's largest gold reserves and with this is tending to prop up the US economy. It also has almost the largest number of dollar billionires, with the number going up all the time.


Where on earth do you get your "facts" from?

USA has EIGHT times as much gold as China!


World official gold holding (December 2010) + percentage of forex reserves.
1 United States USA 8,133.5 74.7%
2 Germany Germany 3,401.0 71.7%
3 Italy Italy 2,451.8 71.4%
4 France France 2,435.4 66.1%
5 China China 1,054.1 01.7%
6 Switzerland Switzerland 1,040.1 16.4%
7 Qatar Qatar 12.4 03.5%
8 Russia Russia 851.5 08.6%
9 Japan Japan 765.2 03.0%
10 Netherlands Netherlands 612.5 59.4%

USA has THREE times as many billionaires as China.

List of countries by the number of US dollar billionaires
World wide top 10 (2011)
Rank Country/Region Number of billionaires[1] Share of
world total (%) Billionaires per 10M Category
— World total 1210 100.0 1.7
1 United States 412 34.0 13.2
2 People's Republic of China 115 10.6 0.9
3 Russia 101 8.3 7.1
4 India 55 4.5 0.5
Last edited by BOBERT: Nov 28, 2011 13:29
Dec 7, 2011 03:07
#5  
  • KEVIN0518
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USA has EIGHT times as much gold as China!
USA has THREE times as many billionaires as China.

Unfortunately, USA is in recession. I just hope that China won't make the same mistake like the USA. If the real estate industry in China collapses, China's economy will be in trouble too.
Dec 7, 2011 13:15
#6  
  • BOBERT
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Quote:

Originally Posted by KEVIN0518

If the real estate industry in China collapses, China's economy will be in trouble too.


Not if..when...and it's already started.
Dec 7, 2011 15:33
#7  
  • BOBERT
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BBC News Business
5 December 2011 Last updated at 01:17 GMT

China warns of 'severe challenges' to exports to West
Containers at the port of Tianjin Sales to Europe and the US comprise just under 40% of China's total exports, but have been falling

China faces "severe challenges" to its exports due to economic difficulties in key Western markets, the country's commerce ministry has warned.
Data due to be released on Saturday will show a sharp slowdown in export growth in November, the ministry said.
Sales to Europe and the US, which comprise about 40% of total exports, were not expected to recover next year.
The ministry said China would instead target exports to developing markets in Asia and Latin America.
Weaker manufacturing China will also try to boost its imports from the West, the ministry said, in order to help support their economies and to balance out China's trade surplus.
Exports to the European Union fell 9% in October versus a year ago, and exports to the US fell 5%.
The country's total exports, however, were still up 15.9%, thanks in part to booming demand from Latin America.
But it was the weakest annual growth rate in two years, and exports were sharply down compared with a month earlier.

Next year there won't be fundamental improvement in Europe or the United States” Wang Shouwen Chinese Foreign Trade Director

"There is a lot of concern in Beijing about weakening demand from the developed world, especially from Europe," said Michael Pettis, economics professor at Peking University.
"China is still overly reliant on domestic investment and net exports to generate growth," he added, noting that Beijing was also recognising that further debt-fuelled growth in domestic investment was storing up problems for the economy and the country's banks.
The poor performance was mirrored by a recent manufacturing survey, which indicated that the sector contracted in November for the first time since the 2008-09 Western recession.
The commerce ministry also blamed rising wages in China for hurting its trade competitiveness.
'Not realistic' "Next year, I think that we will face severe challenges in our exports and imports," said Foreign Trade Director Wang Shouwen.
"There won't be fundamental improvement in Europe or the United States, and costs at home will stay as high as this year, so the foreign trade situation will be severe next year.
"However, some developing and emerging economies are enjoying sound economic performances, so we will attach more importance to exports to these countries."
But China's plan to focus on developing markets is not realistic, according to Professor Pettis.
"Europe, the US and Japan account for more than two-thirds of the rest of the world's consumption, and it is hard to imagine that the developing world can replace them over the next several years.

Dec 7, 2011 15:33
#8  
  • BOBERT
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"To make matters worse, much of the growth that is occurring in the developing world is driven by Chinese demand for commodities.
"So if China is serious about reducing it's over-reliance on investment it will have the unfortunate consequence of reducing growth in the developing world just when China needs it most."
Attempts to increase its exports to the developing world may also meet with resistance.
Recent data showed that Brazil's economic growth had slowed to a standstill.
The country - Latin America's biggest - has previously complained about the threat to its own export competitiveness posed by the weakness of Western currencies.
Meanwhile in India, the mood may be turning against opening up the country's economy to foreign competitors.
The government suspended plans to let global supermarkets compete in the country, following political uproar and public protests.
Dec 20, 2011 00:12
#9  
I am not sure if Chinse economy is on the verge of collapse. But it is really in crisis. The real estate market is the key. It has contributed too much to the GDP growth. If China can not handle it properly, China will follow the Japan and US's steps.
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