Imminent Collpase of Chinese Property Bubble

[ZANU-FF]

what do you think the consequences will be and how will they reverberate to affect you?

[C. Flower]

http://www.reuters.com/article/idUSTRE63B3VJ20100412?loomia_ow=t0:s0:a49:g43:r1:c 0.174492:b32818204:z0

Fantastic description of "the anatomy of a property bubble" here -

Standing in the shouting tumult of a Chinese real estate fair, Chen Shiyong said, feels like watching a suicidal man on top of a building ignoring the pleas of bystanders to pull back from the edge.

Not that many of the some 142,000 potential buyers and curious visitors who crowded into Beijing's latest big housing property sales fair over the weekend were buying Chen's warning of the impending collapse of a price bubble.
Many said commercial housing prices in the Chinese capital and other cities were sure to keep rising, perhaps after a brief dip, shrugging off government efforts to cool the market. The disheartened said prices already well beyond their grasp were unlikely to come down.

"Nobody is listening to the government leaders. There's this mentality that has set in that this is a no-loss market," Chen said, nodding at the crowds around miniature building displays in Beijing's China World Trade Center.

"It's like watching a suicidal man who won't listen to anyone. Whatever you tell him, it simply strengthens his notion that he's right and the rest are wrong," said Chen, a twenty-something investment analyst for Changjiang Securities, wearing thick glasses and a leather jacket.
The Chinese government shares some of his jitters.

Over the weekend, the top bank regulator, Liu Mingkang, said the country's banks must do more to rein in risky lending to land developers.
The average selling price of properties of seven major developers in mainland China increased from 8,069 yuan ($1,182) per square meter in November last year to 10,810 yuan in March, Royal Bank of Scotland said in a report issued on Monday.

[ang]

It looks like the chinese bubble is ready to burst:-


INVESTOR Marc Faber said China's economy will slow and possibly "crash" within a year as declines in stock and commodity prices signal the nation's property bubble is set to burst.

The Shanghai Composite Index had failed to regain its 2009 high while industrial commodities and shares of Australian resource exporters were acting "heavy", Mr Faber said.



http://www.independent.ie/business/world/china-is-facing-crash-on-treadmill-to-hell-2163239.html

[C. Flower]

It sounds like Japan all over again.

Only India seems to have attempted to put some shape on the property bubble, but even they can't stop hot money coming in from outside.

As Brian Lenihan would (not) say - its systemic.

[BrendanGalway]

It looks like the chinese bubble is ready to burst:-



http://www.independent.ie/business/world/china-is-facing-crash-on-treadmill-to-hell-2163239.html

Am I right in thinking this is going to have worldwide ramifications, and bring on the famous Double Dip recession? I dont see how it would stop the Manufacturing sector assuming most of it is exported around the world. If Chinese people stop buying stuff, does it affect the World or just China?

[ang]

There is a good article here on the chinese bubble it's quite amazing how dependent they are on their construction sector:-


China’s property market is a bubble that may burst by as early as this year, according to hedge fund manager James Chanos.

The world’s third-biggest economy may need to keep up the pace of property investment because up to 60 percent of its gross domestic product relies on construction, said Chanos. The bubble may begin to “run its course” in late-2010 or 2011, he said in an interview on “The


http://www.bloomberg.com/apps/news?pid=20601109&sid=an0ehK2dtdXg&pos=11

[DCon]

If Chinese people stop buying stuff, does it affect the World or just China?

If the stuff is US bonds, then yes.

[Edo]

the chinese people buy sweet **** all - they are kept poor and under control.

the Chinese government on the other hand...............

[Yojimbo]

Via the excellent fistfulofeuros blog, here is a very interesting article indicating that the China property bubble may be on the edge:

http://chovanec.wordpress.com/2011/10/03/economy-on-the-edge-of-a-nervous-breakdown/

and this pithier one:

http://bloodandtreasure.typepad.com/blood_treasure/2011/10/not-for-living.html

[jpc]

Via the excellent fistfulofeuros blog, here is a very interesting article indicating that the China property bubble may be on the edge:

http://chovanec.wordpress.com/2011/10/03/economy-on-the-edge-of-a-nervous-breakdown/

and this pithier one:

http://bloodandtreasure.typepad.com/blood_treasure/2011/10/not-for-living.html

that China is on the path for a “soft landing”

This was one of many comments that really made me nervous reading those articles.

[Yojimbo]

that China is on the path for a “soft landing”

This was one of many comments that really made me nervous reading those articles.

Oh yes, that famous 'soft landing'. It all sounds so familiar, doesn't it? Mind you, from the Irish experience, predicting this wrong won't harm an economists media career.

[Count Bobulescu]

More in the same vein.

http://www.globalpost.com/dispatch/news/regions/asia-pacific/china/111028/chinas-bubble-bursting

http://www.globalpost.com/dispatch/news/regions/asia-pacific/china/111020/china-economy-wenzhou-private-lending-credit

[Yojimbo]

And a couple of articles on Alphaville:

http://ftalphaville.ft.com/blog/2011/10/04/691841/chinas-medium-soft-landing/

http://www.ft.com/intl/cms/s/0/a9337b06-fe20-11e0-a1eb-00144feabdc0.html?ftcamp=rss#axzz1bEE3g4Io