GAT_00: I doubt any kind of analysis of China, but it doesn't take an expert to see their growth is largely fictional and what isn't is almost all mass housing growth. We know how this one turns out. Add to that China destroying their environment at a phenomenal and horrifying rate, something on the order of the desertification of China doubling over 25 years, and China started at about 20% desert. I think the country has at most 20 years before collapse.

I wouldn't give it that long. There is a limit to how long they can keep the scheme going.

They print money to build cities and things to boost the GDP numbers. This is causing high amounts of inflation. If they stop building, the GDP numbers will plummet. If they keep building, inflation will go nuts and it will collapse.

While I was in China, it was clear to me it wasn't real and the charade will eventually break down. Their GDP is based on real estate values that could only be derived using cop-math. Problem is, if they lower prices to what they're worth, GDP will crater and the boom will stop. The govt will force the builders to keep building homes that no one will ever buy or can afford, but the charade will be over.

I'd bet they will collapse by the end of the decade. When they do, it will be pretty bad... not because we need them. We really don't. It's because so many companies are 100% reliant on Chinese factories and slave labor. If there is a major supply disruption, you'll see thousands of businesses in America on the brink because they cannot ship goods. Our govt would have to bail them out or watch them burn.

If we get lucky, we may get a economic boom from repatriating our manufacturing base. If we get really lucky, we'll have a post-war boom without the war.

RodneyToady: I'm not entirely sure how much faith I want to put in the Falun Gong Times.

Yeah, let's trust the Chinese government!

If this is even remotely accurate and they regroup say goodbye to US treasuries....they won't have enough buyers.

On second thought if they are bankrupt too does that mean we get a "do-over"?

So a group working on the "you don't need to see the books just trust us" principle was lying?

I for one am shocked and horrified!

doomjesse: If this is even remotely accurate and they regroup say goodbye to US treasuries....they won't have enough buyers.

On second thought if they are bankrupt too does that mean we get a "do-over"?

Treasuries will be fine. Euro bonds just did us a massive favor and became something no one wants to get involved with. So when we lose our Chinese business we'll pick up the customers fleeing the Eurozone.

We should remember to send Greece a fruit basket or something.

Golly gee, one of the most evil organizations in the world is made up of liars covering their own asses?

The US government will prop up the country if they get in any real danger there. We are more dependent upon Chinese slaves than we are on Middle Eastern oil.

All the numbers from China are bad, but they tend to be bad in the same directions. So while the hard number isn't worth all that much, the rate of change can reveal underlying shifts.

Andromeda: That was my impression too when I was there a few months ago. I had a conversation with a Chinese woman who was telling me she and her husband had gotten an apartment out at the fourth ring road in Beijing a few years ago (ie not city center, there are seven rings) which is now valued as more expensive per square meter than a place would be in the center of Paris or New York City. There's just such incredible demand as everyone wants to move to places like Beijing or Hong Kong, and the government's solution in Beijing at least is to bar people from out of the province from buying real estate in the city. Yeah, I'm sure that won't cause more problems.

Here's the deal though, in China you can only live where your parents lived by default. So if both your parents are from Hunan, you're cleared to live there. If you get a job somewhere else you have to get a bunch of paperworks, bribe some people, and stuff like that.

So almost all the blue collar service workers in Beijing are there illegally. They don't have the money or connections to get a permit. They're uneducated rural folk that are basically illegal immigrants in their own country. So the locals get into the landlord business. Buy up a bunch of apartments (since they legally can buy land there) and rent them to those who can't legally buy anything. That's what is pushing up property vales right now. So the whole high property value thing works to a degree because you have this class of permanent renter.

As long as China keeps its people from being able to easily invest in overseas banks (that are insured and stable, unlike the domestic ones), real estate will remain the safest investment by China and the bubble will keep growing. So when the day comes that people do try to sell their houses en masse and move money to Western banks, one hell of a bubble is going to pop.

I tend to prefer comparing it to Wal-Mart instead. There are more effective dystopias out there, but for sheer size and power China still comes out ahead of them all.

When does the current generation hit retirement age? I would put my money on that as the time they finally collapse.

Their population is going to get really old in a hurry, and there isn't much they can do about it.

watson.t.hamster: When does the current generation hit retirement age? I would put my money on that as the time they finally collapse.

Their population is going to get really old in a hurry, and there isn't much they can do about it.

Sure there is. Vietnam, Taiwan and the Korean Peninsula are historically parts of the Chinese empire they can always wage a war to retain what is rightfully theirs.

watson.t.hamster: When does the current generation hit retirement age? I would put my money on that as the time they finally collapse.

Their population is going to get really old in a hurry, and there isn't much they can do about it.

I'm not sure the Chinese (working class, at least) have a proper concept of retirement.

RodneyToady: I'm not entirely sure how much faith I want to put in the Falun Gong Times.

I'm skeptical of the source too, and that even according to the source it's an off-the-records speech, but the fact remains that there's no transparency into anything. It very easily could be that every province is Greece. Even if that's overstating the risk, and only five or six provinces are Greece-like, which five? How would you tell?

If there is any consolation though, it's that the Chinese government will do whatever it has to do to ensure survival, and there's none of that silliness like "property rights" or "legislative procedure" to stop them.


doomjesse: If this is even remotely accurate and they regroup say goodbye to US treasuries....they won't have enough buyers.

On second thought if they are bankrupt too does that mean we get a "do-over"?

China is not a primary dealer in US treasuries. And in any case they only own about 10% of all treasuries on the market, so if they stop buying, all that's going to happen is that interest rates go up to attract buyers. Considering that we're at historically low rates, we can absorb the hit.

Lost Thought 00: watson.t.hamster: When does the current generation hit retirement age? I would put my money on that as the time they finally collapse.

Their population is going to get really old in a hurry, and there isn't much they can do about it.

I'm not sure the Chinese (working class, at least) have a proper concept of retirement.

Of a sort, they do. Age discrimination is more of a biatch there than here. A 40-year-old who's worked in shiatty Chinese factories since 15 is a broken shaking husk of a person. 40-year-olds don't get hired in white-collar roles much either. 40 is the 'go back to your shiatty rural village and raise chickens' age.

China hasn't just been riding a bubble of 'working age' adults (which will peak), but a bubble of 20-30-somethings. Which is popping already.

I am curious to know what Herman Cain has to say about this.

"I hear the Chinese economy is only a few years away from causing a global catastrophe..."

Stratfor has been saying almost this same thing for years. There banking sector is worse off than ours but because the 5 major banks (each for a major sector of the economy) are essentially arms of the government they have been able to cook the books. At east 50% of their loans are non or underperforming but they keep propping up a lot essentially failed businesses in attempt to keep unemployment down, sort of like the GM/UAW bailout but on a bigger scale.

Rule for thumb for Chinese numbers:

For bad numbers like unemployment double the official figure

For good numbers like GDP cut it in half.

WE TERK THEIR JERBZ!

[Chris Tucker] Woo! You know he dead!! [/Chris Tucker]

IamKaiserSoze!!!: Larry Lang ?-11/12/11

nice knowin ya pal.

Rarry Rang?

FTFA:

"Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 81.6 percent, Lang said."

I thought China had really low taxes. Am I missing something in translation here?

GAT_00: RodneyToady: I'm not entirely sure how much faith I want to put in the Falun Gong Times.

I doubt any kind of analysis of China, but it doesn't take an expert to see their growth is largely fictional and what isn't is almost all mass housing growth. We know how this one turns out. Add to that China destroying their environment at a phenomenal and horrifying rate, something on the order of the desertification of China doubling over 25 years, and China started at about 20% desert. I think the country has at most 20 years before collapse.

If China's GDP goes negative it will be the end for the ruling class.

There is already plenty of unrest with the 99.9% that are not wealthy.

Revolution will tear the country apart.

And destroy Walmart.

5 years max.

I don't profess to have any expert knowledge into the
Chinese economy, but this smells like bullshiat.

China is trying to engineer a "soft landing" in their economy, bringing down inflation without starting a recession. There are real doubts as to whether they can do this and they may spiral into recession, but alleging that such a huge creditor nation is bankrupt is bullshiat I think.

Cubansaltyballs: I'd bet they will collapse by the end of the decade. When they do, it will be pretty bad... not because we need them. We really don't. It's because so many companies are 100% reliant on Chinese factories and slave labor. If there is a major supply disruption, you'll see thousands of businesses in America on the brink because they cannot ship goods. Our govt would have to bail them out or watch them burn.

If we get lucky, we may get a economic boom from repatriating our manufacturing base. If we get really lucky, we'll have a post-war boom without the war.

Well, I do think it will bring some manufacturing back, but China is old news now. Vietnam, Malaysia, etc are growing in that world now. Now, for the techier stuff, it will probably just move back to Korea, Taiwan, and possibly Japan. Cost a little more, but the skilled labor is there and the facilities are there, and still probably cheaper than here.

doomjesse: If this is even remotely accurate and they regroup say goodbye to US treasuries....they won't have enough buyers.

On second thought if they are bankrupt too does that mean we get a "do-over"?

If I ever meet you, I'll do you a favour and shoot you in the kneecaps.

Arkanaut: If there is any consolation though, it's that the Chinese government will do whatever it has to do to ensure survival, and there's none of that silliness like "property rights" or "legislative procedure" to stop them.

Socialism is China's blessing and curse. As a matter of the worldwide economical crisis, South Korea is a closer example of financially-ruined Greece of Asia. South Korea could be poorer than North Korea or China by 2020 if Seoul fails to manage this financial crisis.

Lost Thought 00: The US government will prop up the country if they get in any real danger there. We are more dependent upon Chinese slaves than we are on Middle Eastern oil.

Brazil is eager to step in to fill the void and is a hell of a lot closer. Foxconn is planning to open plants there next year.

I was saying this 10 years ago when all the talk was about how scary China's growth is and that they will take over the world. As I see it, there are two myths about China.

1) They will take over as the economic power house of the world - Response, socialism doesn't work, the charade can't last forever.

2) They will go to war and use all of the single guys of this unbalanced generation to win it - Response, they will have a revolution before they go to war.

if you think that China operates under socialism, you do not understand what socialism is.

plcow: I was saying this 10 years ago when all the talk was about how scary China's growth is and that they will take over the world. As I see it, there are two myths about China.

1) They will take over as the economic power house of the world - Response, socialism doesn't work, the charade can't last forever.

2) They will go to war and use all of the single guys of this unbalanced generation to win it - Response, they will have a revolution before they go to war.

I'm not entirely sure how you label what the Chinese government does as "socialism".

Lost Thought 00: The US government will prop up the country if they get in any real danger there. We are more dependent upon Chinese slaves than we are on Middle Eastern oil.

How the fark are we going to prop them up? By borrowing more money from them? I think you may have divided by 0 there.....

Moopy Mac: plcow: I was saying this 10 years ago when all the talk was about how scary China's growth is and that they will take over the world. As I see it, there are two myths about China.

1) They will take over as the economic power house of the world - Response, socialism doesn't work, the charade can't last forever.

2) They will go to war and use all of the single guys of this unbalanced generation to win it - Response, they will have a revolution before they go to war.

I'm not entirely sure how you label what the Chinese government does as "socialism".

They do; why not others?

SDRR: Lost Thought 00: The US government will prop up the country if they get in any real danger there. We are more dependent upon Chinese slaves than we are on Middle Eastern oil.

How the fark are we going to prop them up? By borrowing more money from them? I think you may have divided by 0 there.....

Most likely, by providing military aid in quelling their upcoming "terrorist" uprisings.

SweetHomeNowhere: South Korea could be poorer than North Korea or China by 2020 if Seoul fails to manage this financial crisis.

Things are far from great for them but that's an insane exaggeration. For SK to get as bad as NK in nine years, they'd have to be hit by a meteor or something.

beta_plus: FTFA:

"Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 81.6 percent, Lang said."

I thought China had really low taxes. Am I missing something in translation here?

Not sure how he got those numbers, but the key part is "direct and indirect taxes". For one, China has a VAT, which the US does not have. I also understand that there are a lot of fees that Chinese citizens and businesses have to pay, for example for moving goods around the country, or for various licenses. 81% is really high though, I thought the actual taxes were closer to 20% on average.

Shazam999

shoot me in the kneecaps? I mean really...did no one teach you how to shoot?.. what if you miss?...aim higher....

doomjesse: If this is even remotely accurate and they regroup say goodbye to US treasuries....they won't have enough buyers.

On second thought if they are bankrupt too does that mean we get a "do-over"?

Bwhahahahahahahahah!

Another idiot who buys the propaganda that "China owns the US". They own 10% of US bonds, almost 85% is owned by US citizens and institutions. The other problem in your scenario is that if China goes tits up investors will be looking for a safe haven for their investments and their is nothing safer then US treasury bonds. Unless of course the Republicans go full retard with debt ceiling again and completely fark the US economy.

No the biggest problem we will have if China implodes is a short term supply problem.

Millennium: Moopy Mac: plcow: I was saying this 10 years ago when all the talk was about how scary China's growth is and that they will take over the world. As I see it, there are two myths about China.

1) They will take over as the economic power house of the world - Response, socialism doesn't work, the charade can't last forever.

2) They will go to war and use all of the single guys of this unbalanced generation to win it - Response, they will have a revolution before they go to war.

I'm not entirely sure how you label what the Chinese government does as "socialism".

They do; why not others?

They label it as socialism with Chinese characteristics or Socialist Market Economy. Neither are what the average person pictures when they hear socialism.

Occupry Tienanmen Square!

This time it's sewious!

plcow: 1) They will take over as the economic power house of the world - Response, socialism doesn't work, the charade can't last forever.

To be pedantic, it doesn't matter if socialism works or not. If it's not a viable strategy, as you said- it will collapse. If it is a viable strategy, other people will adopt it and compete on the same terms.

Carth: They label it as socialism with Chinese characteristics or Socialist Market Economy. Neither are what the average person pictures when they hear socialism.

yeah thats because the normal dumbass american thinks universal health care or unemployment insurance is "socialism".

Moopy Mac: plcow: I was saying this 10 years ago when all the talk was about how scary China's growth is and that they will take over the world. As I see it, there are two myths about China.

1) They will take over as the economic power house of the world - Response, socialism doesn't work, the charade can't last forever.

2) They will go to war and use all of the single guys of this unbalanced generation to win it - Response, they will have a revolution before they go to war.

I'm not entirely sure how you label what the Chinese government does as "socialism".

How can you NOT classify what they do as socialism? They are literally following the Marxism playbook. The government controls the resources, and distributes wealth as it sees fit.

What countries do you consider to be socialist?

Millennium: They do; why not others?


No one believes Best Korea when they refer to themselves as a Democratic Republic either.