Surreal photos of China's failed 'city of the future' . . . there weren't any people! "The once flush-with-cash town of Ordos, China, has been called the world's largest ghost town. Roughly 15 years ago, a coal-mining boom led local government to throw money at urban development there, in the hopes of creating a new epicenter of culture, economy, and politics. Ordos New Town — also known as Kangbashi — would hold 1 million residents and be known for its massive conceptual-architecture projects, residential towers, and state-of-the-art sports venues. But high property taxes and poor construction deterred people from settling in Ordos. Today, though some 100,000 people call it home, most of the city sits unused, wasting away. "The whole city feels like a post-apocalyptic space station straight out of a science fiction movie," says photographer Raphael Olivier, who captured the city in a series titled, "Ordos - A Failed Utopia.'" China has at least 60,000,000 housing units in the same condition, unused. This is a shocking number. The entire US housing stock is about 117,000,000. Quick Facts: Resident Demographics| NMHC.org This reminds me of the most over populated city on Earth, Pyongyang. I amuse myself.
Comments
The Age of Cheap Oil and Natural Gas Is Just Beginning
. . . although we will need to wait out the desperate oil bulls who keep fluffing the price every time something happens near an oil field. More below the fold. China Evicts Investment Firms Amid Fears of Unrest
. . . China might not make it through the decade! More below! Men with guns kindly ask Chinese economists to keep comments on the Chinese economy positive!5/4/2016 China Warns Economists, Analysts, Reporters About “Overly bearish” Remarks | MishTalk
They would hate for the truth to find its way out! Go read the whole thing. The Chinese economy is little more than a massive structure of lies attempting to confuse the world into believing something that is not. The Chinese economy will have its come-to-Jesus moment, and it will likely be spectacular. Well, unless you are one of the CCP. Then it might come at the end of a rope tied off to a lamppost. Or maybe the parties luck will hold. We need Chinese economy a dead pool! China Takes Drastic Measures To Save The Regime
China is in a rough patch, from the huge debt overhang, to the inane property values, to the fact that China has 60-70 million housing units which have been bought for speculative investment, and are unused, to the first time in human history, brand new never used ghost cities, to the wealth inequalities, to the PLA. Perhaps it will be able to suss out the problems, and find some intricate Rube Goldberg plan to resolve them, but I am not betting on it. This is a very good analysis of China's internal problems. Friedman did not point out that using the PLA to address issues as it did in 1989 is likely no longer possible. Nor did he discuss the fact that there are a near infinite number of ethnic groups in China who hate the Han, and who are about as stable as warm Nitroglycerine. China is a confusion of problems, competing interest, and lightly papered over chaos. It is just waiting for an economic crisis to touch off something the CCP can't control. Here's hoping! China has a frightening amount of debt, and it is building little of intrinsic value . . .4/30/2016 China’s debt reckoning cannot be deferred indefinitely - FT.com
. . . instead it is simple inflating an already inflated, and fraudulent economy. "Timing the end of a credit boom is more luck than judgment. There is no question that lenders own bad loans, reckoned unofficially by some banks and credit rating agencies to amount to about 20 per cent of total assets, the equivalent of around 60 per cent of GDP. These will have to be written off or restructured, and the costs allocated to the state, banks, companies or households. Yet in a state-run banking system, where loans can be extended and there are institutional obstacles to realising bad debts, the day of reckoning can be postponed for some time. More likely, the other side of the lenders’ balance sheets, or their liabilities, is where the limits to the credit cycle will appear sooner. Loans have to be funded by deposits, and China’s banks are venturing beyond fairly stable household deposits to more volatile funding sources in the shadow finance, interbank and corporate markets and overseas. Growing dependence on these liabilities renders the banking system, and the economy as a whole, more vulnerable to withdrawals that are prone to happen suddenly or when lenders lose confidence in economic and financial stability, as we know from 2008." This is an incredibly precarious position to be in for China. Add to this the fact that China is seeing a massive bums rush expatriation of money. This has driven home prices in Vancouver, and many parts of the West Coast into the stratosphere. China has been very lucky up to this point. However, what it was doing was fairly simple, in that it was adopting the earlier model that the West used to become wealthy. However, that model will only take China so far, and the next step requires the Chinese to innovate, and there is no evidence they can do so. "For the foreseeable future, China’s neglect of the problem of excessive debt growth looks likely to continue. Beijing cannot afford to spark a disruptive end to the credit boom and a slump in investment, with anecdotal signs of rising labour unrest and unemployment — especially before next year’s 19th party congress, where President Xi Jinping plans to consolidate his support at the upper levels of the Communist party. The question, then, is whether the politics of debt control will shift after the congress. With a slowing economy and rising financial instability risks, it is hard to imagine Beijing making a strong commitment to cut credit dependency and impose debt management policies such as more defaults and write-offs, the sale of national assets, and the transfer of wealth from indebted state companies and local authorities to private sector households and creditors. Yet, without such a shift, China is likely to experience greater financial turbulence than it has seen recently, which may not happen by the end of this year but will not take three years either. The main outcome would probably be a growth hiatus of unknown duration, for which the rest of us need to be prepared." The when question is unknowable, the next question is how severe. Take essential precautions, and make sure that if China has a rough landing you are nominally protected. I am assuming that once it goes it will be a doozy! China keeps buying up American companies, and lawmakers are starting to sound the alarm
. . . blithering idiots. "China is buying American companies at a record rate this year, and lawmakers are getting increasingly worried about it. In February, 45 members of Congress signed a letter to the US Treasury Department's Committee on Foreign Investment (CFIUS), stating their concerns about a Chinese-led investor group's bid to buy the Chicago Stock Exchange." I'm old enough to remember when the Japanese buying spree during the 1980s was considered the horror to end all horrors. If you remember, the Japs came in and bought all kinds of assets like Rockefeller Center. Mon Dieu! Then then the nation essentially went bankrupt, and they sold many of these assets and left. The beauty of this was they bought high. and sold at firesale lows! So, exactly why are the American politicians bloomers in a knot over the Chinese coming in and buying American companies for more than any American is willing to pay? Are they afraid of money? Do they think the Chinese will steal our workers? Mon Dieu!!! Only a politician could explain this nonsense. What is happening is the Chinese are beginning to realize that China is a Ponzi, and their money is at risk in China. So, they want to take it out, but can't. But China will let them buy foreign assets, and so the wealthy Chinese come to buy assets. Why here? Because we are the only truly safe and stable country on the planet. Europe has socialismed itself into uncompetitiveness with their over-regulation, and bloated welfare state. Japan is dying, with debt to GDP of nearly 250%!!! The international oil patch is in zombie mode. Where would one go to buy valuable assets which will be available in the years and decades to come? America! They can buy stock, they can buy assets, like corporation, entities, mines, wells, and land. LET THEM! Our businesses will use the money for new productive ventures. That is good for the economy. Why don't our idiot politicians know this? Caught On Tape: "Enormous Crowds" Of Unemployed Chinese Miners Take To The Streets, Clash With Riot Police
"'While so far most Chinese worker strikes had been largely peaceful, two weeks ago we said it was only a matter of time before these turned violent after Reuters reported that "China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution.' All this changed overnight when as AFP reports, thousands of miners in China's coal-rich (or poor depending on one's perspective) north have gone on strike over months of unpaid wages and fears that government calls to restructure their state-owned employer will lead to mass layoffs." These are not people laid off, they are only owed back wages, and threatened with layoffs. Just wait till the layoffs begin. "Citing the video shown below, AFP reported that thousands of protesters were marching through the streets of Shuangyashan city in Heilongjiang province, venting their frustration at Longmay Mining Holding Group, the biggest coal firm in northeast China. Pictures showed enormous crowds filling the streets. And here is why we said this is the biggest threat facing China: "I'm on my knees, my family can't eat," an elderly woman pleaded with a man who appeared to be a government official. "Tell me, how can we live?" she shouted, before collapsing and being rushed away by fellow protesters. In the video footage from Heilongjiang, dozens of police cars, lights flashing, lined the streets, and protesters complained of violence by authorities as tensions mounted. 'Traffic in the centre of Shuangyashan city was halted," a witness told AFP, adding "some people were hurt.'" The crowds are truly impressive. But this is just a local problem, right? Wrong! "AFP adds what we have been warning about for months: "the situation in Heilongjiang exemplifies the dilemma faced by Chinese authorities, who say they want to reform the world's second-largest economy and at the same time seek to avoid unrest." China's state-owned enterprises (SOEs) are plagued by overcapacity and many are unviable, but the government has been loathe to kill off such "zombie" companies, fearing unemployment could lead to instability. Instability such as the one described above, and shown in the video below. * * * This is just the beginning: China plans to lay off about 1.8 million workers in the steel and coal industries, a human resources and social security ministry official said last month, and millions more across all state-owned "zombie firms." Earlier this month Premier Li Keqiang again pledged to encourage "structural adjustments" in his opening speech to the annual session of China's Communist-controlled parliament. Judging by the predicted confirmation violence, the only adjustments China has in place is a massive police force trained to break up precisely such protests, something we further showed back in May 2014 when we demonstrated how 'Chinese riot police train for a "working class insurrection.'" What's with China and zombies? There are zombie cities, zombie companies, zombie firms, zombie everything. The problem will not stop at these state owned firms, there are many other businesses which are being forced to close. China faces much unrest, and it is not clear how this will be handled. The people of China will not likely suffer tanks rolling through their streets, and citizens murdered just to keep order. On the other hand, the CCP knows little else. This could be an epic high noon showdown, if the CCP cannot find a way to defuse this situation. No matter what, it does not appear that the heady days of the early 2000s will return for China, not in the immediate future anyway. While I am hoping for a positive outcome, with the CCP agreeing to relinquish some power, assist these destitute families, and a turn to a more reasonable growth model in China, I am not holding my breath. China Howls but Dalai Lama Draws Crowd at Human Rights Talk
. . . no, not the Dalai Lama, silly, China! China today has some residual power driven by its status as the worlds largest manufacture of plastic trinkets, and iPhones. But not much as it is beginning the collapse of its myriad Ponzi Bubbles. IMF issues warning on global growth as China exports plunge - FT.com The IMF is correct to worry about China, but wrong to think that a little consumerism can right the economic ship of China. China is a massive debt Ponzi, construction Ponzi, Ghost cities Ponzi, infrastructure Ponzi, bank Ponzi, to name but the larger few. China cuts growth forecast - FT.com This is mostly blather, and bluster. It is impossible to trust these numbers, and from what I have seen, the backing internals do not support GDP growth of 6.5% and may not support GDP growth of even 3%. Nor do I see any of this changing over the next many years. I have no crystal ball, but the world has achieved peak Socialism in Japan, Europe, China, Russia, and much of Eastern Europe. The results of this are demographic decline, an aging population, business stagnation, and economic stagnation. The feckless, dithering politicians who cannot take the steps necessary to shift from the dying Socialist/progressive economic model to a new functional economic model, will not be savior in this scenario. I suspect this ends with the following cue card,"And a hard landing was had by all!" Huzzah! Huzzah! Huzzah! The Dalai Lama only needs to wait out the rapidly weakening China to win this one. What that win will look like is anyones guess, but let's hope, and pray for something less "interesting" than a full on revolution in China. Perhaps China could learn from the late 20th Century Russian revolution, and make it relatively uneventful? Yeah, I think that's mostly wishful thinking too, but I am sticking to that wish, since it would mean fewer casualties. Perhaps the CCP survives these rough seas, Perhaps not. Regardless, nothing will be the same for the CCP and its leaders. Once the China Colossus feet are revealed as made of clay, it will never be viewed the same. And once it cracks, and the little mouse inside wanders out, it will return to its appropriate place in world events. Money Bomb Coming
All because the Chinese economy is collapsing. China's Economy Collapses with Exports Mish nails it, the IMF foolishly believes the solution to decades of excessive debt is consumer activity, when the solution is restrained monetary policy, and fiscally responsible government. I am not holding my breath. |
AuthorMaddog Categories
All
|