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The Chinese Collapse: A (MASSIVE) Housing Overbuild || Peter Zeihan
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- Опубликовано: 26 сен 2023
- Trying to predict what the Chinese system will look like as it collapses would be a fool's errand, but exploring China's housing market in this context could be fruitful.
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#china #collapse #housing
I remember when I lived in Shanghai and I’d visit friends in the outskirts. It was a surreal sight, just rows after rows of monolithic apartments all the way to the horizon. It was like walking through an unfinished map in a video game.
And the slums, huge differences from the city center, almost a different world.
I felt the same when I lived in Shanghai
How do build 200% more housing than your population. Nobody is that dumb.
Such a great comparison.
I feel that way when I hang with my trailerpark buddies
I was in China for a month the year before covid hit. I went from just outside of Hong Kong all the way to Beijing and literally saw canyons...I kid you not canyons of skyscrapers that all sitting empty. We started a game of trying to count and keep a tally of all the sky crane construction cranes and finally gave up. There were just too many to keep track of...in the various parts of the country. And it was everywhere...not just here or there. We would be in what appeared to be the middle of nowhere and up would pop a hundred cranes...and high rises that were under construction. It was crazy.
We saw major...multilane highways that just went nowhere. One deadened just outside of our hotel on like the 20th floor. They would have had to knock down the hotel...a Hard Rock...and couple housing high-rises to complete it or continue it. It was total building mayhem.
We caught a train in Schenzen(sp) and it literally took hours...hours...on the bullet train to leave the urban sprawl. I had never seen anything like...nor anything comparable since.
I figured it was all a false propping up of their GDP...thus the Portland cement shortages of the past few years...but from your info it was driven by citizen investments, not a gov push to shore up GDP. Unreal.
It's both. The CCP drives GDP by keeping everyone working in construction. And they force the citizens to invest their savings into this real estate which created a fake "need" for more construction. The citizens would probably have been happy to buy some stock indexed to the Dow Jones if they could.
As a kayak guide for two decades on Maui I had the privilege of meeting many affluent Chinese. One time a large family came with an old patriarch. The weather got nasty before we could get to shore. When the old man had a problem in his single kayak, the entire family abandoned their grandfather to the stormy sea and the foreign guide, and he literally cried in shame. When we got to shore I scolded them for no team work and no loyalty, and he gave me a big tip. I remember thinking (as I towed him, politely ignoring his emotions), about the obvious disenfranchisement of the youth, and the women. I don't know why I remember him, but I aways have. Aloha 🌺
Mainlander Chinese are a low-trust society just with disposable funds. Unfortunately money doesn't buy conscientiousness.
Insane. Programmed minds!!! That’s so sad. Their leader is removing humanity from their minds and preparing them for undying loyalty even in the face of death/famine. I hope they wake up. I hope we all do!! Crazy world but humanity and species tribalism is how we survive!
Maybe he was a terrible man that had alienated his family.
I was staying at a hotel on Waikiki and talking to the waiter at breakfast, he told me he really doesn’t like waiting on chinese guests. He said they have poor attitudes and never tip.
A remarkable story. Without context, it seems to highlight the every-man-for-himself sentiment I’ve been seeing from learning about China, perhaps a little bit of “Let it Rot.” Thanks for sharing! I do hope the family is managing.
Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.
My main concern now is how can we generate more revenue during quantitative times? I can't afford to see my savings crumble to dust.
Very true! I've been able to scale from $50K to $189k in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns
@@jeffery_Automotive that's impressive!, I could really use the expertise of this advisors , my portfolio has been down bad....who’s the person guiding you.
I encountered Julie Anne Hoover through my wife, and I emailed her. She is guiding me. Since then, she has given me chances to buy and sell the stocks in which I'm interested in. You can hunt her up online if you require care supervision.
@@jeffery_Automotive Thanks for sharing this. I did my own little research, and your advisor looks advanced and experienced. I wrote her and dialed her twice but she didn't pick up so I scheduled a phone call.
Not only has it been overbuilt, much of the housing is crumbling because of corruption and cost cutting in the building industry.
Tofu Dregs construction! Hopefully their military is built on Tofu Dregs as well!
As soon as anything is built, there will never be an attempt to maintain it. It’s a steady decline the day a building or any infrastructure opens.
@@linmal2242 please don't use any Chinese made products, including anything inside that can possibly be made in China.
Before buying anything, stripe everything down, anything inside that's made in China, please don't buy it, it's tofu built.
@@jesinbeverlyyes USA spend so much money on military, they have no money to maintain their infrastructure.
USA infrastructure is in decline, does your USA government even care????
You can pick the concrete off building with your hands!
Made in China
I once rented an office in a town called Huizhou. It was dirt cheap and I soon found out why. When I decided to explore the area around that building, I saw a huge number of relatively new apartment buildings on seashore that were completely abandoned and I doubt there ever was anyone who lived there. I stayed in a rental apartment and that apartment was the only one inhabited on the entire floor. That was a truly surreal experience.
8:51 this situation will motivate the leadership to strike out blaming their problems on others such as Taiwan, other regional nations, and of course the U.S. I fear war is near.
@@jackmccombs3602💯
@@jackmccombs3602You may be right but I really hope you are not. A war with China would be catastrophic, globally.
@@jackmccombs3602Try a tinfoil hat, should help with the voices.
@@jackmccombs3602War has always been near, when there are internal problems in China... It's their go-to solution when they need to divert the public's attention from a major problem: Create a bigger one that they can blame on someone else.
Well it's time for the BRICS- New World Order to come up with a default reserve currency or simply go back to gold as the reserve. It will be too chaotic for each country to trade in their respective currencies with the daily change in exchange rates.
Ironically, these are the conditions in which life-changing money is made by those who remain calm, patient, and take controlled risks. Volatility goes both ways. The banks are in a big crisis. The mar-ket looks very shaky. The bigger the red candles, the bigger the green ones. I have made over $280k in the last 14 months by invest-ing through my FA.
@@TomD226 Do you mind sharing info on the adviser who assisted you?
@lowcostfresh2266 There are many financial coaches who excel in their profession, but for the time being, I employ Laurel Dell Sroufe because I adore her methods. You can make research and find out more.
@@TomD226 Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Uh.....sure. Keep thinking the garbage that is BRICS is the answer.
Chinas home ownership in Canada has been absolutely brutal on the Canadian system -driving up costs leaving literally entire subdivisions with no one living in them.
We have exactly the same thing happening in NZ. Our silly government allows Chinese speculators to purchase housimg which inflates house prices and rents. This at a time when we have peak historical homelessness.
This is western finances failure.
Same thing in Australia - Sydney worst of all
non citizens need to be banned from owning property in Canada
It’s fashion to blame the chinese for everything but look no further than your voted officials who make it almost impossible to build new units by regulations that control the process.
What Peter doesn't mention here (unless I missed it), is that while there may be sufficient empty housing stock in China to house the entire population twice over, much of it is simply in the wrong place. In the major cities, especially Beijing and Shanghai, the cost of housing is astronomical and has become a major drag on the economy and a further contributor to China's onrushing demographic catastrophe. In other parts of the country, however, vast housing estates lie virtually empty because nobody wants to live there, but local authorities are dependent on land sales to developers for significant proportions of their revenue, meaning that the cycle of borrowing, building and bad debts keeps going round and round virtually unchecked. And everybody expects the government to step in and bail them out when things go bad. It's a completely rotten system that is only going to get worse as the Chinese economy continues to implode and the Party-state prefers internal repression and nationalistic tubthumping to meaningful structural reform - especially the boosting of internal demand through the construction of an effective and comprehensive social welfare system.
i just had some of my people go to china for a week to a factory where we bought some large machines. it's in the middle of china in a city you never heard of but it's 15 million people. so they have lots of cities like that . not everyone lives on the coast.
A teacher can buy an apartment in Shanghai. Can a teacher buy an apartment in New York. Stop spreading bullshit.
I cant believe this excess housing 2 times over. That would mean they have industrial and labour reserves which are gigantic. If true the Chinese economy is much much bigger than the US
This comment was needed. Having enough housing for everyone, alone, is not a bad thing. It’s like they solved that issue permanently.
No mention of tofu dreg construction. Most of those empty shells suffer from failing quality and they're close to collapse.
I have lived in China and must say that their "prestigious" builders also make crappy apartments. My friend bought a new apartment and from outside it looked amazing, but quality was abysmal. Walls were made of concrete but you can remove it with your hand and little pressure. Apartment then started shaking as structural pillars developed cracks. You cannot sue builders in China as the company owners are CCP members. My friend had to leave the apartment and lost all his savings and has mortgage to pay for the apartment he cannot live.
F*CK THE CCP FOREVER
Said a liar who never stepped outside the streets of San Francisco where home less drug addicts roam.
lmao cope boy. you cant stop hiding what china does. but hey at least the homeless in china only get drunk not high so that makes it much better right?@@ishtiaquealamin6147
Yes. They call it tofu buildings. The Chinese bots don't like anyone knowing the truth.
@@ishtiaquealamin6147 Said someone who offers absolutely no evidence that OP was doing anything but telling the truth from personal experience.
We should start calling Peter “the teacher”. Such clear explanation, I wish I had a teacher like that growing up.
10 years ago I asked friends in China how these high rise housing projects that are over 90% empty could be economically sustainable. Their answer was that they trusted the government (mean Beijing/CCP) to come up with appropriate policies should that becomes an issue. Good luck with that!
China will be fine no matter what they are self reliant country.
A self reliant country? They rely heavily on imports of food and oil.
@@laosasean8482Ehh, what are you talking about? They are one of the most import dependent countries in the world. They import extreme amounts of energy and most of the goods that allow them to grow their own food. They would loose half their population in under 3 years if that got cut off. Self reliant? Good lord...
@@rasmuslernevall6938 No dummy its not that, most countries are dependent on them they are supplies chains to the world India never going to replace them. They are one of the oil production countries. They have to suitable land for agriculture especially rice and that how they survives overs 50000 years and still going strong. Where is Roman empire or Roman civilization. They also the countries got the most fresh water, and they generate more electricity than everyone else in the world. The housing problem is not doing good simply because they intend to slow its down, so that its could hurts countries such Australia, who exports most of the law material to China. The most dependents countries are EU, South Korea, and Japan because they have no natural, not like China or Russia which they have the natural. If China would collapse its would collapse thousands years ago like Roman or western civilization. I guess you must from India and India so jealousy of China, because China is doing better than you. And China is only country on this planet that is challenging US in, economy, military, technology and political. US is will collapse due to racism, inflation, debt, they spend too much money on the war, while they don't taking care the crumbling infrastructure and the own citizen and why don't you go do some research about Flint, Michigan instead bashing about Chinal
Good luck with trusting government, the main mistake of human life.
Peter never fails to whisper sweet nothings into my left ear
Chinese whispers
Harder ddy Zeihan harder.
Is that a reference to little Miss Dynamite
I thought if was my new AirPods.
Or right ear depending on how you hold your phone
I remember traveling from the airport to downtown Beijing about 10 years ago. It was close to sunset and the air was thick with smog, thicker than New Delhi in the summer. It smelled like coal and dirt. Off the highway there were these huge apartment cities, they looked like Co-Op City in the Bronx only without people, cars, just completely vacant and newly built. I saw at least 4-5 of these small cities. I remember thinking what the hell is that all about?
DUDE, 10 YEARS AGO.. LOL.. A LOT OF THINGS HAVE HAPPENED SINCE THEN.
Same here. I never seen so much construction in my life
Also me did see the samein Chine, cities full of empty & brand new building.
@@icet6665like what ? Cool discussion
@@icet6665 like even more construction of empty buildings?
Regarding the massive overbuild of roads and buildings in China, one thing I've noticed... Economic "goods" are only good if they make each person's life better in China. But if these "goods" are useless then all that material was wasted. We experienced a global sand shortage for this.
I was hoping Peter would give us his insights on how the Chinese calamity that is about to happen, would effect Europe and North America( and rest of the world ).
Awesome content as usual.
Cheers
Basically, any Western companies like pension fund management crooks or Westerner banks that loaned the development companies money are about to get rammed with a red hot poker right in the....
You'll also see a lot of commercial property for sale or building sites suddenly empty. They'll have had Chinese investors either gone bankrupt or on the run. It's happening in Sydney and Europe right now.
In China the buyers will also borrow money from relatives for the down payment. I met lots of Chinese there and they would tell me their relatives loan them money to help them buy homes . I worked with 2 Chinese in the USA and they would tell me the same and that since they worked in the USA they were expected to loan money to relatives in China. They complained that when they went back to China they had to bring back $10k to give out as loans. $10k because that is the max cash you can take on a plane without declaring it. It is not just the people buying the house that is loosing their money. It is their entire family.
This is true. Happens in a lot of places.
Remittance slavery , basically .
crazy
Don’t forget that bankruptcy in China is different in the fact you lose the asset but still owe the loan. Bankruptcy doesn’t get you out of debt.
Technically you’re not even able to “own” property/land in China at this point, you lease it. 70 year leases and then returned to the government.
Also, my gf’s father who lives in China had to travel 3 hours on the train to the regional province recently just bc he wanted to take money out of the bank. Even then he had to argue there for 5 hours before they let him withdraw what he wanted. It’s getting really bad the way the government is forcing you to limit how you want to use your money rn.
Once again, Peter has offered us an optimistic look at the state of the Chinese economy. Assuming 3 persons per unit, a generous assumption, there is enough housing in China to house not 200%, but 300% of not China's population, but the population of all of humanity. Over 99% of these building are tofu dregs construction junk. At best they will be land fill material in a decade, but I think most will still be laying where they fell. (talk about a dystopian hellscape that would make "Idiocracy" look good) If a Chinese citizen is not connected to the party and they have any wealth, that is where they put it. The market for housing is so bad that one dissident reports that she could only find one person that had sold a "unit" (condo/concrete cubbyhole). That person had to sell their property for half the price they had paid and that was in a Beijing suburb, the most desirable local housing market in China. The wealth of China's "middle class" has been destroyed.
The funny part is that Chairman Pooh Bear and the CCP have done this to themselves, not the US, Taiwan, Japan nor India.
Even if we wanted to help them, I don't think we could and I'm fairly certain we don't really want to help them. Especially when there will likely be hundreds of thousands, if not millions of people in Africa starving to death at the same time.
I'll let everyone imagine for themselves the political prospects for any Congress person that even suggests sending aid to the PRC while every night the news is running video of hundreds of starving African children queued all day for a cup of rice, spoonful of beans and a half liter of bottled water.
The only way the rest of us can "help" China now is to continue to prop up their dysfunctional regime by allowing them to take massive advantage of us. ALL OF US.
Things like shutting down all US steel production so we only purchase from China. It's clear nonsense, but that's the scale of what it would take. And they did it to themselves, no outsider forced them into their various over extensions.
I take the words of Chinese dissidents with even more salt than I do with the CCP. When Chinese get scorned, they act like jealous girlfriends (male and female) than a new rival looking to take you out.
The Africans did that to themselves too. I have no sympathy for them. They can't function outside of bare-bones tribal societies, so I say we leave them too it and stop sending aid. Let the weak of Africa expire from the gene pool while the strong rise. We've been doing them a disservice by funding the reproduction of weak Africans and preventing the strong from doing their thing. Time for that to end. Hopefully it might result in a better Africa in the end, but even if it doesn't, who cares? They aren't our problem to take care of. We owe them nothing. The debt from "colonization" has been paid off a hundredfold. Time to leave.
No cliche left unturned here!
@@daweilaotou1269 That's your reply to a 7 month old and very erudite comment? You say there are cliches, but fail to mention a single one. Pathetic!
_And,_ all of that may not even factor in the incredibly poor quality of so many of the structures (houses, buildings, etc) built during the boom years. Many are literally uninhabitable, and have been since they were built. I don't have specific data on this problem, but as someone who has done business in and has actually visited China, Taiwan, and Hong Kong, I expect that a shocking percentage of these structures will simply have to be knocked-down and carted off to the landfills. _Financial armageddon_ for everyone in China seems assured, to me.
It's funny too because I think a lot of US GDP is questionable just due to how we calculate it (example: how they prefer two working parents putting kids in daycare because that's extra GDP instead of counting a stay at home parent as GDP). However China's GDP is bonanzas. Building things that will never be used so the number goes up is so counterproductive that it could be considered insane (fraud).
@jackjones4824 They already do. By one estimate they printed (relative to the size of their economy) more than 3x as much currency as the US in the past decade! And the US currency is frequently pulled out of circulation and stuffed into foreign banks and under foreign mattresses. NO ONE does that with Yuan, so the scale of "printing their way out of the problem" is far worse than here in the US.
It's actually one more nail in their economic coffin. They can't push that one much harder.
Also appaling to think that billions of tons of CO2 got pumped out and global warming put into over drive to make all that cement which will not even be a roof over anyones head, but rather just a pile of rubble in a dump.
@Patriciajames96 you don't invest in a bank account. You save in a bank.
@jackjones4824All of that is internal. At some point, those strict controls mean they can tell the people "This leaf is money. Take it!" and ... the people will. But that's not a stable way to maintain a global economy. And as things fall apart internally, they will be forced to use any foreign currencies to buy the raw materials they require internally (Not to make goods to export, just internally). At some point they run out of foreign capital.
Then they are telling the people "This is not a leaf, it is a pig. Eat this pig and be happy! Be happy or we will put you in jail!" and insanity like that. It's a short term solution and may very well lead to a revolt.
The Chinese people are very docile for their government. But ANY nation can eventually rise up and kick out the barstards if it gets hard enough. China either has to make some major changes to how they run their run their country or they may find the CCP up against that figurative wall in a few years.
I've been consistently pointing out for years that China's rapid growth is unsustainable, and now it appears that the consequences are catching up with them.
Yeah I predicted that the Chinese economy ill collapse every Christmas for the last 60 years, and it looks like Peter is going to make it happen at last
Sure thing, Dale. You saw it all for years. Thanks
It's all daydreaming andwishes of westerners in reality China is stronger now than it has ever been. China contributes more to global economy in terms of PPP GDP than United States. So keep dreaming and stay jealous while China is growing .
😢😢😢😢😢😢another looser
china has been a poor nation 60 years ago all the way til about 30-35 years ago. thanks to deng shaoping @@yoyolim538
Peter, please please do a U.K special. We need it.
Wow, mindboggling data, Peter! Been following you for a year now, and it appears you are correct in your predictions most of the time. Thanks, and keep it up, big fan!
Agreed. So much data that didn't exist😂😂😂😂
There is no personal bankruptcy in China. People will live the rest of their lives trying to pay off the mortgages on those properties. They may also spend that time paying for properties their parents bought. As their people fail their systems will fail. The number of things in our houses that say 'made in China' will start to disappear. Maybe other countries will step up before that toaster breaks, maybe not.
in the next 10 years, india, vietnam, mexico , Brazil , are about to bite a seriously huge chunk out of chinese manufacturing
Citizens wont move into ghost towns if there are no jobs nearby. But if Peter Zeihan's assessment is correct that China will face a deindustrialization crisis in the near future, a lot of Chinese will have no jobs anyway and will have to live in their 2nd and 3rd apartments since they have no where else to go anyway. China might be the one to establish a UBI just to placate the jobless. At least they wont have a homeless problem
The transition is what concerns people. I've asked my doctor and dentist, and they both buy all of their consumables from China by way of Amazon. @@eduwino151
Wow! Didn't know that. However, we have similar situation with student debt, which cannot be canceled through bankruptcy. Yet corporations can get away with screwing their suppliers and creditors by using bankruptcy despite the fact that CEOs are literally paid to predict and manage the future vs. literally teenagers that are expected know and pay for any mistake forever without forgiveness for not knowing the future of their chosen career. Note: not a student. Did my tike back in 90s.
If I go bankrupt in Australia, I still have to pay off the debt.
My understanding is that if instead of paying cash for an apartment you financed it with a mortgage, you are required to pay off the mortgage, regardless of whether you are able to or not. You can declare bankruptcy, and the apartment can be repossessed and resold by the bank, but you still have to pay off the mortgage. This is going to leave potentially millions of Chinese with a debt burden that will follow them around until they die. I cannot imagine the psychological as well as financial disaster this policy will precipitate.
It won't work. They already have a "lie flat" problem. No way you can keep people indebted and hope they will continue to contribute.
The Asianometry channel has some really good, detailed videos about the recent history of South Korea , their economy and their companies.
Their corporate history is fascinating and crazy.
He has been predicting chinese collapse since 2010, lol!
He said it will happen but doesn't mean he meant in 2010
I’d be surprised if the value of real estate assets is even a quarter. A lot of projects remain unfinished, and then there’s the tofu-dreg quality issue. Moreover, Japan and South Korea had friends, notably us, where China is mostly hated, loathed, despised, and not liked. China is giving a whole new meaning to circling the drain.
We are not friends with China but it isn't in our interests for them to collapse right now. The West would likely help if this happens.
Why not ship America's illegal immigrant-refugees to where there's housing and low paying jobs?
@@sativagirl1885an increasing number of illegals are coming from China to escape economic hardship caused by COVID lockdowns
@@sativagirl1885😂😂😂😂😂😂nobody wants to leave America, one; and two the Chinese do hate foreigners with almost twice the hatred the KKK had for blacks
@@sativagirl1885because they had housing and jobs and they decided they could make more on American welfare then working in South America
From ‘12-‘15 I traveled extensively throughout China as part of their air quality monitoring campaign as well as visiting multiple coal fired power plants. I was surprised at these rows and rows of unfinished apartment buildings shrouded in green mesh. It appeared to be unfinished projects. Seems ti to have turned out to be true.
vast empty cities
You never visited China.
@@DK-ev9dg Huh?
Tofu dreg construction, that's the aftermath of it what you saw.
SerpenZA documented such things. He and his buddy had to leave before they were taken political hostage like their 2 Canadian friends.
As far as i'm aware, owning your own house equates to a 70 year lease from the gov.
The way they're built though, they'd be lucky to still be a salable property in 70 years.
Huge crowded people traveling out during the 10/1 holiday. Unbelievable. People need to wait 2+ hours for a table in Restaurants in a secondary city. One more thing I had observed for this time I visited my wife hometown (a very small and used to be very low income), almost every family have cars. I live in US for almost 10 years. I am always confused by the huge deviations between the US news and what I saw and heard in China. For the over built apartments, yes. This is the fact. My family (my parents, my 2 kids, my wife and I) has 5 apartments in China big cities. But we don’t have any pressure to keep it, my parents used one and 2 of them have rent out, another 2 are empty there. Many of my friends are similar to me. People like to keep the homes, and the cost for keeping is very low and can be ignored. And btw, there is no homeless and looting shoplifting in China which is confusing me as well.
THIS GUY, PETER ZEIHAND HATES THE CHINESE SO MUCH, HE DREAMS EACH NIGHT FOR ITS DESTRUCTION. IT IS NO WONDER THAT HE WORKS FOR THE AMERICAN MILITARY
What your point? That's it's not that bad?
@@jameskamotho7513 He is well off and his friends are too so there are no problems in China.
Man I know I can't be the only one who would love to hear you do a deep dive into Japan and it's future.
My relative lives in a tier 3 city in China and even that city has 3x as much housing as people. When you get off the highway near a ghost area, you get swarmed by real estate sales goons
To all: do you know any example in history where missmanaged housing led to total collapse of economy? No. In fact, housing is the fastest way to invest and earn on this investement. This is like ponzi scheme of some sort. Yes, it crashes at the end as all ponzi schemes do but there is no country in the entire world where it led to total collapse. Labour in China is not overpriced yet. It cannot be said for US and western Europe. Overpriced work with no real tehnological advantage leads to more problems than missmanaged housing in the long term.
Peter, what's your take, then, on where China and their government goes from this point? From the point of collapse of their system? My concern is they create a war to distract and also start actively calling in their loans to seize resources and valuable assets they have "acquired" around the globe. What are your thoughts on how things end up there and impacts to the US and the rest of the world?
As usual an incredibly concise analysis Peter. Appreciate the flyover and comparison with Japan and Korea. Having spent significant time in Japan the past 19 years, what you reference in terms of Japans churn-through journey has been noticiable.
Notice how they try to emulate Japan and Korea, yet are completely unwilling to consider human rights protections, legal enforcement of those protections, and rigorous auditing of business practices.
@lawyerup2280 those are chinese governmet officials and the ultra wealthy, not the chinese middle class, who are doing that
@lawyerup2280 I think he referenced it sort of indirectly, when he mentioned the Chinese people regularly searching for -- and finding -- loopholes and workarounds to the capital controls, which the CCP then closes off, which leads to the search for new ones, and on the circle goes. For instance, I think a lot of the Chinese acquisition of real estate in Canada has been through third parties.
lol as usual? Mark Milley just admitted that it's not a spy balloon, and re-watched this guy's analysis about the balloon 7 months ago, what a laughing stock it was!
pls boost the audio by like 50%
Bump
Peter is great, but I've been hearing China's imminant collaspe since 2000 and yet has not happened. So I'll wait on this one to really, really happen...if it does, I'm sure it will shock and hurt me, but the "sky is falling" for me is too old of a story.
I'm 70 and have been hearing about the collapse of the U.S. for 50 years. Still hasn't happened. Will it happen? Sure, everyone knows that. But when? There's the tricky part. I read a quote years ago that stuck with me: "there's a lot of life in an empire". In other words, empires, which both China and the U.S. are, take a lot of killing. But they do die. Sort of like a grizzly bear. You can shoot a lot of holes in a grizzly and it's fatal but he's still up and swinging. Eventually he'll get weak and go sit down and die. The question is how much damage is he going to do before that happens?
Anyone saying China was about to collapse has been a voice in the wilderness until now. Once can certainly cast doubt on a repeated prediction with has failed to occour, but in this case one can not say that it was a 'conventional wisdom' prediction. That people are giving it credibility now is because their is evidence for souring AND a clear change in government leadership structure (no more change over of leadership) which is an indicator of the loss of self-correcting capacity.
@@kennethferland5579 1990. The Economist. China's economy has come to
a
halt.
1996. The Economist. China's economy will face a
hard
landing
1998. The Economist: China's economy entering a
dangerous period of sluggish growth.
1999. Bank of Canada: Likelihood ofahard landing
for
the Chinese economy.
2000. Chicago Tribune: China currency move nails
hard
landing risk coffin.
2001. Wilbanks, Smith & Thomas: A hard landingin
China.
2002. Westchester University: China Anxiously Seeks
a
Soft Economic Landing
2003. KWR International: How to find a soft landing in
China.
2004. The Economist: The great fall of China?
2005. Nouriel Roubini: The Risk of a Hard Landingin
China
2006. International Economy: Can China Achieve a
Soft
Landing?
2007.TIME:Is China's Economy Overheating? Can
China
avoid ahard landing?
2008. Forbes: Hard Landing In China?
2009 Fortune: China's hard landing China must find a
way to recover.
2010. Nouriel Roubini: Hard landing coming in China.
2011. Business Insider: A Chinese
2012. American Interest: Dismal Economic News
from
China: A Hard Landing
2013 Zero Hedge: A Hard Landing In China
2014. CNBC: A hard landing in China.
201 5 Forbes: Congratulations, J You Got Yourself A
Chinese Hard Landing
2016. The Economist: Hard landing looms for China
2017. National Interest: Is China's Economy Going To
Crash?
2020. Economics Explained: The Scary Solution to the
Chinese Debt Crisis
2021. Global Economics: Has China's Downfall
Started?
2022. Cathie Wood: China's COLLAPSE Is FAR Worse
Than Vou Think
Peter - Can you comment on the impact to the US if the Chinese economy collapses. As a Mortgage guy, I've seen terrible news as a reason to get ready for lower interest rates. However, I'm not so sure that would happen this time. If products made in China stop arriving, it could cause higher prices for many of those goods which is an inflationary pressure. What are your thoughts on how these events will effect America?
1990. The Economist. China's economy has come to
a
halt.
1996. The Economist. China's economy will face a
hard
landing
1998. The Economist: China's economy entering a
dangerous period of sluggish growth.
1999. Bank of Canada: Likelihood ofahard landing
for
the Chinese economy.
2000. Chicago Tribune: China currency move nails
hard
landing risk coffin.
2001. Wilbanks, Smith & Thomas: A hard landingin
China.
2002. Westchester University: China Anxiously Seeks
a
Soft Economic Landing
2003. KWR International: How to find a soft landing in
China.
2004. The Economist: The great fall of China?
2005. Nouriel Roubini: The Risk of a Hard Landingin
China
2006. International Economy: Can China Achieve a
Soft
Landing?
2007.TIME:Is China's Economy Overheating? Can
China
avoid ahard landing?
2008. Forbes: Hard Landing In China?
2009 Fortune: China's hard landing China must find a
way to recover.
2010. Nouriel Roubini: Hard landing coming in China.
2011. Business Insider: A Chinese
2012. American Interest: Dismal Economic News
from
China: A Hard Landing
2013 Zero Hedge: A Hard Landing In China
2014. CNBC: A hard landing in China.
201 5 Forbes: Congratulations, J You Got Yourself A
Chinese Hard Landing
2016. The Economist: Hard landing looms for China
2017. National Interest: Is China's Economy Going To
Crash?
2020. Economics Explained: The Scary Solution to the
Chinese Debt Crisis
2021. Global Economics: Has China's Downfall
Started?
2022. Cathie Wood: China's COLLAPSE Is FAR Worse
Than Vou Think
Peter, the audio on your video is always panned hard left.
Isn't that called mono, as opposed to stereo?
I'm just thinking about all of the abandoned cities that there will be in 40 - 50 years. It's gonna look post-apocalyptic as hell.
They were built so badly they will be dust by then it sounds like
Not 100% overbuild, but ***200%*** ?!? My immediate reaction was basically, "Oh, geez."
This is so far beyond "This Cannot Be Good" that I have no words.
I want to see a debate between Zeihan and Ray Dalio. One predicts Chinese collapse, the other predicts it will become the next super power.
Over building is an issue but the bigger issue are the defauts. 30% of China's GDP is housing and since 2021 40% of buyers defaulted. Just last month Country Garden, China's largest developer, missed 2 interest payments and announced they are 187 billion in debt.
You are talking about 10 years ago,now only 8% of GDP is buildings.
Over a billion angry people and a government needing to channel that anger towards anything but themselves. I think we can predict how this is going to end.
Wow ok, channeling anger towards real estate developers and a corrupt government towards... Evil westerners? Ok, let's see how stupid they are. Even worse for them because if they act up, the west might not just embargo them into the crisis of a lifetime, but eventually bomb them back into an agrarian society, and a much smaller one at that.
Yes. A war as hollow as the empty, crumbling apartments.
Who will they go to war with?
Taiwan? No, that would provoke the US.
Japan? Lol, no.
Maybe India? That would be interesting. Technology similar, shared land borders, not a US ally, and big enough that the international community would probably view it as a fair fight and not get involved.
They've demonstrated at Tiananman how they respond to malcontents.
I sure can't. Would love to read such predictions - especially if they were to include approximate timelines. Kinda thinkin black swans might be waiting in the wings.
I’m new to your site and need to say your views on the global economy and geopolitical pressures is a fabulous breath of fresh air. Not that the news is good these days, but an educated rational view of the situation is very needed. Thank you.
About a year ago, it was figured that enough housing was developed for 90% of the population
I’m fairly frequent visitor to China and on the point of individuals who’ve invested in real estate.
On 2nd homes, the government mandated a huge percentage (I believe 50%) of the price be paid upfront, thus minimizing bank exposure, or at least so it was thought.
With the collapse of entities such as Evergrande, an implosion on the everyday citizen wiping out their investments will be chilling to watch.
This will be far worse than our subprime issues back in 2008.
And if I may add, their manufacturing sector is taking a huge hit with purchasing agent data (PMI) being below 50 for quite sometime. Anything above 50 is expanding markets, sub 50 is contracting.
Cargo ships are sitting idle whereas 2 years ago you couldn’t book space.
All bad signs
'an implosion on the everyday citizen wiping out their investments will be chilling to watch' - maybe a civil war comes finally...
Fun fact, something that I discovered in the course of trying to follow what's going on in China right now: There is no such thing as personal bankruptcy protection in China, except for experiments being conducted in Hong Kong and one other province. All of these people with underwater mortgages and other debts (like loans to fund businesses that have gone belly-up) they can't pay are in deeper trouble than we Americans can imagine. It already is ugly, and it's going to get even uglier. Not only for individual debtors, but also the banks that are going to be stuck with all those bad loans.
Japan and Korea are each run by around 6 families. When Japan speculation due to implicit government guarantees in the stock market collapsed, none of the families would take the economic writeoff and become poor, so all the nonperforming assets like steel production just stayed on the books forever, preventing economic growth. That is what actually happened.
Peter ... your videos are THE BEST. Thank you ...
Just an FYI ... the output volume of your clips seem to be significantly lower than others on You Tube. Not sure if I am the only only one experiencing this.
But again ... content is awesome.
You're not the only one. I'm ok with it, but some people have issues with the audio.
I just wish the audio was better balanced. Loud in the left, whisper in the right....
most audio engineers respond to free hand crafted beer.
Same, can confirm
+1
"Any minute now guys..."
Peter Zeihan, 2035
"No, no, for sure now" (2045), "godammit, this time, I know it" (2055), "who are you? where am I? Who's Peter?" (2065).
The stunning part for me is that chinese leadership, more than a year into this becoming known publicly, seems to be prioritizing coverup rather than taking the drastic steps required to at least dampen this crash somewhat.
Peak Chinese culture, save face at all expense. They are a silly people we decided to get in bed with.
Thanks again for making a complicated topic easy to digest. Unfortunately I doubt there is any positive way out of this for China.
Thanks Peter, good analysis. I will add one datapoint to make things worse,one I'm sure you know. Ecergrande (now in bakruptcy in NYC of all places, it's almost comical) and a dozen other property developers were racing so fast to build tofu dreg complexes to keep up with demand that they borrowed billions from LGFVs, among others, to "buy" land and start building, selling unfinished apartments from plans, skipping town, rinse and repeat. So crazed buyers bought unfinished apts from crazed developers who borrowed money from LGFVs backed by crazed city and provincial goverments desperate for revenue they could divvy up among crazed party members. Bubbles within bubbles. A mania unlike any other, including Tulip bulbs and the Roaring 20s. So yeah, maybe they are overbuilt by 200 percent, but a big slice of these ghost cities are unfinished and poorly built. You wouldn't dare live in them. China is headed for a crash that may bring down the CCP. Fortunately, US investors are not heavily exposed. But BMW and Mercedes can kiss half their sales goodbye.
Would add to that : Merc is partially owned by the Chinese , like Volvo / Polestar is fully owned by them
Happy to see BMW fail , lived in Munich for a while , arrogant smug people who forget how to make good looking cars 20 years ago, plus the company is still majority owned by that war profiteering family
It’s like getting your geopolitical news from Bear Grills these days. Nice locations. Winter will be interesting.
many here had the same experience and observation as i did
was once given a two level four bedrooms luxury apt in a new building to live in
stayed on and off for a year. bathrooms smelled due to wrong plumbing. wall peeled leaving nasty crumples. the entire building had another resident
there were many many buildings in the surrounding areas, few lighted rooms during night
its more than a decade ago. the thought out of that experience was: building compounds are not communities
Just left China earlier this year. Not missing the diarrhea-colored tap water even within the 4th Ring of Běijīng.
1990. The Economist. China's economy has come to
a
halt.
1996. The Economist. China's economy will face a
hard
landing
1998. The Economist: China's economy entering a
dangerous period of sluggish growth.
1999. Bank of Canada: Likelihood ofahard landing
for
the Chinese economy.
2000. Chicago Tribune: China currency move nails
hard
landing risk coffin.
2001. Wilbanks, Smith & Thomas: A hard landingin
China.
2002. Westchester University: China Anxiously Seeks
a
Soft Economic Landing
2003. KWR International: How to find a soft landing in
China.
2004. The Economist: The great fall of China?
2005. Nouriel Roubini: The Risk of a Hard Landingin
China
2006. International Economy: Can China Achieve a
Soft
Landing?
2007.TIME:Is China's Economy Overheating? Can
China
avoid ahard landing?
2008. Forbes: Hard Landing In China?
2009 Fortune: China's hard landing China must find a
way to recover.
2010. Nouriel Roubini: Hard landing coming in China.
2011. Business Insider: A Chinese
2012. American Interest: Dismal Economic News
from
China: A Hard Landing
2013 Zero Hedge: A Hard Landing In China
2014. CNBC: A hard landing in China.
201 5 Forbes: Congratulations, J You Got Yourself A
Chinese Hard Landing
2016. The Economist: Hard landing looms for China
2017. National Interest: Is China's Economy Going To
Crash?
2020. Economics Explained: The Scary Solution to the
Chinese Debt Crisis
2021. Global Economics: Has China's Downfall
Started?
2022. Cathie Wood: China's COLLAPSE Is FAR Worse
Than Vou Think
Not only should most of this stuff never have been built, but sadly most of it wouldn't be useful over the long run anyway because most modern buildings in China are "tofu" (sometimes tofu dreg) construction. That means that the buildings are of incredibly poor quality, with shortcuts and corner-cutting being the de-facto rule in the construction industry. As such, it will never be possible to re-use these buildings for anything e.g. retirement villages or whatever, because the buildings are likely uninhabitable. Such an insane waste of resources, it beggars belief.
Wow. I've been listening to you for a long time and I'm familiar with your view on the future of China, but this vid hit home way more than any other done previously. The world is going to have to hang on tight because 20 to 25 percent of the world's population is going to go bananas when all of these problems come into individual family homes to roost. Hang on tight!
To solve the issues China would simply have to become a leading power in the BRICS+ and attract a corresponding number of young migrants to fill the houses and pay the pensions, like Germany or the USA do.
@@johannebbes5449 When your population is nearly a billion and a half, you'll need way more people than are available...
@@Pafemanti If you seriously want to challenge the USA as the world's leading power, you need appropriate support from other countries around the world. Then population growth through fluctuating migration is definitely helpful.
The port city of Guangzhou, also known as LITTLE AFRICA IN CHINA, could serve as an experience model.
It would be exciting to find out how Russians react to the offer to become a millionaire in China instead of fighting with Putin for the occupation of Ukraine.
Another way to fill the apartments is to combine the mini-apartments into larger units and thus create an illusion of increasing prosperity
1.3 billion people out of 8 billion is not 20 to 25%. It's 16%.
@@johannebbes5449Absolutely wrong. BRICS basically is a complete nothing. India hates China, this little group is nice for them to meet up I guess but they don’t do anything substantive.
China hasn’t and won’t see inward migration for obvious reasons. The language is very difficult for most. They have a brutal authoritarian regime that is actively committing a genocide in Xinjiang. Foreigners are monitored constantly. Who would ever move there? Well nobody, because they have a net OUTWARD migration.
Germany and the USA have inward immigration because people want to live there. China has outward migration because people want out.
And Peter is always so optimistic about everything else.
Exactly, he’s only a CIA propagandist. It is so obvious what he is up to
He does something you don't - research.
@@GeorgeStar how do you know??
Of course, he's the one who delivers nothing but good news for American think tanks who pay him handsomely to push the China collapse narrative
@@sbukelibecause you come with zero facts, just character assassination, aka commie tactic.
Can we take a moment to appreciate the scale we’re talking about? Somewhere around 2 BILLION houses. The amount of wood, concrete, copper, steel, tar, asbestos necessary to satisfy that need. The mind is boggled beyond comprehension.
Peter, Do you have info on how deep the economic troubles are in China beyond the housing situation. I.E. banking , materials, industrial production, etc. I always believed that China had a bubble in building almost everything and that's why they could report such over the top economic growth. Very much like the US housing bubble based on wild financing
Just finished The Accidental Superpower. Didn’t realize it was published in 14. Would love to see a revisit of those topics and how close your analysis’ were!
The End of the World is Just the Beginning. I think he wrote this one last year.
There is an update, " The Accidental Superpower: 10 Years On".
Amazing to hear someone speak, so coherently without any notes
And no proof
6:05 the Chinese property list has not been restricted to China. The cash flight that is involved with foreign real estate purchases has not been apparently, seriously restricted.
I heard another analyst says the wheels will come off when local governments (which are way in debt) become illiquid and can't pay police forces. Is that possible? I would think they would keep their security apparatus solid but I am not sure how the central government can manage that vs. it being a problem for local governments.
I am seeing is banks collapsing
Source proof ?
Another factor to consider is the “twice the Chinese population” estimate is based on the official population statistic of 1.4 billion. Three separate recent studies estimate the actual population to be from 800 to 900 million. So it’s closer to triple.
Really? Is it really plausible that they could have overcounted / lied to SUCH a ridiculous degree? 🤔
300 million died from Covid
800 to 900 million seems like an overcorrection. The estimates I've heard are more like 1.2 billion.
@@antred11 It's possible they lied about deaths more than overcounting the live population.
haha, you're brainwashed by China, the actual population of China should be from 80 to 90 million.
What's really terrifying about China right now is that it's even more of a perfect storm than 2008.
Before the '08 crash real estate accounted for less than 10% of US GDP, it's close to 30% in China. The financial sector also has huge amounts of money tied up so they will get hit hard too.
I saw a stat today there are 1.8 million Chinese people who have already paid for homes that will never be finished and Evergrande doesn't have the money to pay them back.
China is already broke and a bailout, while not out of the question, will be really bad for them; especially because with high youth unemployment and an old population they will have massively decreases in tax revenue for decades.
Peter, 2 Qs: 1. Is the govt of China investing in US real estate (or is it only private citizens)? 2. How will China’s economic implosion affect their significant holdings of US Treasuries/Bonds? Will they sell of a ton of them, causing big problems??
In a senario where China is selling its TBills because it is collapsing and desperate for money then the whole world will be in a 'flight to safety' and if current trends hold of a strong US economy the rest of the world would snatch up the Tbills and maintain the price, if not drive it higher as we have seen in every crisis. The whole fear-mongering senario about Chinese ownership of Tbills was about their ability to liquidate them on their initiative as a punitive measure on the US to raise US gov borrowing costs. If done in an environment of percived US weakness and Chinese strength in which the market is already seeking to abandon Tbills and towards Chinese equivilents then this move could be a means to put a final nail in the coffin of US financial hegemony. But that senario requires all the prior American weaknesses and Chinese strengths to actually exist, a senario which was plausable as recently as the 2010's but is now farther and farther away.
I have a cousin who’s a successful business owner. He doesn’t even know how many apartments he owns. He just kept on buying. All sit empty because he expects the housing price to ever go up and doesn’t want the hassle of managing tenants.
China, historically speaking, has a knack for folding in on itself, evolving, revolving, devolving every 100 years or so. It has been something that happens at a dynastic level. AS you say, Peter, they are about to suffer a trifecta of perfect storms coming together all at once. The CCP may be a thing of the past in the next 5 years, and the upcoming turmoil for the Chinese people, it's gonna be horrifying. My hope is that most of the knock-on effects don't collapse the total global economic structure. You touched on most western financial instutions having insulated themselves from the potential economic shockwaves in a previous video, but have our governments gotten ball deep in debt to China? Scary times.
Treasury bonds are auctioned in a competitive market. What the Chinese don't buy will be purchased by other buyers. China has no control of US debt.
This myth of government indebtedness to China is incredibly stupid even on the surface level, China owns no more Fed Bonds then comparativly smaller economies and owning someone elses debt instruments dosn't mean you can make them default, it just means YOU are screwed if they DO default.
the only way the US will make money off of a Chinese collapse is it China implodes without starting WW3 like Russia did in 1991, and the US cuts a bunch of shitty business deals to rip off the Chinese population
ironically that might be how the next US "economic boom" takes place...
1990. The Economist. China's economy has come to
a
halt.
1996. The Economist. China's economy will face a
hard
landing
1998. The Economist: China's economy entering a
dangerous period of sluggish growth.
1999. Bank of Canada: Likelihood ofahard landing
for
the Chinese economy.
2000. Chicago Tribune: China currency move nails
hard
landing risk coffin.
2001. Wilbanks, Smith & Thomas: A hard landingin
China.
2002. Westchester University: China Anxiously Seeks
a
Soft Economic Landing
2003. KWR International: How to find a soft landing in
China.
2004. The Economist: The great fall of China?
2005. Nouriel Roubini: The Risk of a Hard Landingin
China
2006. International Economy: Can China Achieve a
Soft
Landing?
2007.TIME:Is China's Economy Overheating? Can
China
avoid ahard landing?
2008. Forbes: Hard Landing In China?
2009 Fortune: China's hard landing China must find a
way to recover.
2010. Nouriel Roubini: Hard landing coming in China.
2011. Business Insider: A Chinese
2012. American Interest: Dismal Economic News
from
China: A Hard Landing
2013 Zero Hedge: A Hard Landing In China
2014. CNBC: A hard landing in China.
201 5 Forbes: Congratulations, J You Got Yourself A
Chinese Hard Landing
2016. The Economist: Hard landing looms for China
2017. National Interest: Is China's Economy Going To
Crash?
2020. Economics Explained: The Scary Solution to the
Chinese Debt Crisis
2021. Global Economics: Has China's Downfall
Started?
2022. Cathie Wood: China's COLLAPSE Is FAR Worse
Than Vou Think
I highly doubt China will ever slip out of CCP's grip. The people have nothing to fight against the CCP.
And I use to think the Chinese economy was unstoppable. How little did I know.
Yea, they're going to overtake us haha.
Hope it is not unstoppable as it will soon turn into a war economy, just look at crazy russia. The end of a dictatorship is always a war, hopefully in the case of china it will be only a civil one, not against other countries. Or dictatorships maybe just melt down like in the case of ussr, but I think that was just a once in a blue moon occasion - also linked closely to the war against afghanistan.
It is still unstoppable , kid !
Just look at the widening trade gap between China and US !
@@CHixon America Economy is extremely Robust. Take a look at Philadelphia last 12 hours. So many people buying I Phone 15 Pros.
top kek
@@PleaseGetReal
In 2017 when Walmart, Pep Boys, Auto Zone, and Target started moving manufacturing out of China and into India, Brazil , Vietnam, Mexico, and Indonesia. That was the beginning of the end of the Chinese economy.
These companies do not manufacture much in China, kid.
They get their stuff from the Chinese manufacturers. You guys really know zilch about the world except opening your stupid gap !
There is a couple of things that amaze me Mr Zeihan didn't mentioned in this video specifically:
- first, the intricacies of Chinese culture respect of assets and marriage. For what I know, if a man wants to get married in China, he needs to have at least some kind of property, that's when over construction comes to save the day "yes, I might be renting here in the big city, but upstate I own an apartment, so I have property and we can get married".
- second, the majority of those overbuilt properties are in buildings (or neighborhoods) considered "tofu dreg projects", and if even people try to claim their house or apartment, they would find that the place is unlivable, due all the construction deficiencies because of corruption.
So, my questions would be, ¿Could you elaborate further on how these points, compounded with the current demographic and governance crisis, would play out for the Chinese in the short and middle run?, and if there's a real threat of an internal war in China that could spread and affect the rest of Asia.
Thank you.
Ah yes, another uplifting masterpiece by Peter.
Source trust me bro
Peter, could you please comment on recent Indian-Canadian row? Also the political outlook of Canada?
First Trudeau resigns
@@Chrisklown "must", I know. But "will", is what I'm asking.
Justin from Canada looks like Klaus Schwab's eager little goose stepper, a politician concocted in a lab somewhere...
Profecy, Globalism, 2023. Resignation: Jacinda Ardern. Resignations, future: Justin Trudeau, Anthony Albanese, Emmanuel Macron, Lula da Silva, Volodymyr Zelensky, Xi Jinping, Chris Hipkins, etc. Abdication: King Charles III. Deceased: George H.W. Bush, Shinzo Abe. Deceased, future: Jimmy Carter, Bill Clinton. Deceased, future: Nancy Pelosi, Chuck Schumer, Maxine Waters, Dianne Feinstein, Jerry Nadler. Rerignations: General Milley, Mitch McConnel, Merrick Garland, Christopher Wray, Mark Zuckerberg, Eric Swalwell. Indictments: Bill Gates, Susan Rice, Eric Holder, Hillary Clinton, Boris Johnson
I always need a peter pick me up in the morning🥰
You have concisely said what most others are too timid or too dull to say.
I would like to hear your thoughts around the probable knock on effects to other countries entrapped inside their belt and roads initiative? Geopolitical affinity, realignments or total swings?
dont they have to pay back China the 'cheap' loans ?
A very interesting topic, I agree. I have the impression that many of these Belt and Road loans are in trouble as the poor countries cannot repay them. A road to nowhere isn't productive collateral. So what now?
Thanks for this, but a couple of questions. Could you increase the volume it is very low. The other question with all the debt around the world, who do you thinks owns it? We know that most Japanese debt is owned by its citizens, but what about the rest of the world?
It sounds like it's far worse than I ever thought. I'm far from being well versed on how economics work, but when I saw all those almost whole cities full of empty apartment buildings banking on people moving in, I thought "this can't be good ten years down the road, because won't that greatly reduce home/apartment values?". Now that he points out many have wrapped up savings in those, man glad I'm not there. Wonder what and when that last straw will be to break that back. We're going to hear it one day here. History in the making.
1990. The Economist. China's economy has come to
a
halt.
1996. The Economist. China's economy will face a
hard
landing
1998. The Economist: China's economy entering a
dangerous period of sluggish growth.
1999. Bank of Canada: Likelihood ofahard landing
for
the Chinese economy.
2000. Chicago Tribune: China currency move nails
hard
landing risk coffin.
2001. Wilbanks, Smith & Thomas: A hard landingin
China.
2002. Westchester University: China Anxiously Seeks
a
Soft Economic Landing
2003. KWR International: How to find a soft landing in
China.
2004. The Economist: The great fall of China?
2005. Nouriel Roubini: The Risk of a Hard Landingin
China
2006. International Economy: Can China Achieve a
Soft
Landing?
2007.TIME:Is China's Economy Overheating? Can
China
avoid ahard landing?
2008. Forbes: Hard Landing In China?
2009 Fortune: China's hard landing China must find a
way to recover.
2010. Nouriel Roubini: Hard landing coming in China.
2011. Business Insider: A Chinese
2012. American Interest: Dismal Economic News
from
China: A Hard Landing
2013 Zero Hedge: A Hard Landing In China
2014. CNBC: A hard landing in China.
201 5 Forbes: Congratulations, J You Got Yourself A
Chinese Hard Landing
2016. The Economist: Hard landing looms for China
2017. National Interest: Is China's Economy Going To
Crash?
2020. Economics Explained: The Scary Solution to the
Chinese Debt Crisis
2021. Global Economics: Has China's Downfall
Started?
2022. Cathie Wood: China's COLLAPSE Is FAR Worse
Than Vou Think
Four basic electronics, I am a hardcore Sony consumer. But for home appliances I'm a hardcore Samsung consumer. When I move, I'm getting rid of all my appliances and buying all new Samsung washer, dryer, dishwasher, and refrigerator.
Wow, hard to imagine how this doesn’t impact everything.
Source v?
Hi Peter,
Correct me if I am wrong. I have an issue with a statement of your regarding the difference between the housing market crash of '08 and the current Chinese market crash. You mention that the US only had an over build rate of around 5%. However from what I understand the sub prime mortgages granted to the vast majority of people during the US housing market bubble were primarily done on credit and not cash basis.
According to you the Chinese have primarily sunk savings into these forms of housing .From my own intuition, this should technically cause less of a problem from a standard of living and unemployment rate perspective than the housing market would have as it is not corporate finance, additionally the vast majority of Chinese citizens would not have received yields on these properties from a "house flipping" standpoint.
Hence I stand to be corrected but it does not make sense to me for there to be that large of a "bailout" as the bailout was already absorbed by the local populace. The only thing I can personally see happening is a generalized drop in personal net worth but this would not necessarily affect GDP other than with issues related to being able to access credit. As this would be personal credit for the most part and not primarily corporate credit as it was during the housing market crash of '08. This should technically affect a smaller % of the population than you expect.
Additionally I find another factor people are not considering with regards to the Chinese is the way in which their manufacturing/construction system works. That is essentially to produce as many units as possible to bring down the overall cost per unit item. Essentially "Economies of Scale" concept for simplicity.
I stand to be corrected but from what I understand according to your statement. The vast majority of these projects were created with free cashflow and not "tactical maneuvering" of the entire financial system as it was in the US. At the most I would interpret the Chinese housing market bubble as a Ponzi scheme equivalent at best.
Not the mention that the Chinese population size is essentially 4 times the size of the US. Not to mention the overall lower cost of living and the fact that the Chinese produce a fair amount of their own goods in house (Baring primarily agricultural goods).
Overall I think it will be a lot easier for them to recover than some might expect. I stand to be corrected but just from my own logic, this would make a lot more sense.
@jackjones4824 I understand. With the corporate finance bit, I am referring to the fact that the money used to finance houses during the subprime era prior to the US housing market crash was essentially comprised of made up corporate credit due to over leveraged and compounded derivate loan assets that the banks lent to housing applicants instead of it being actual saved up cash as in the case of the Chinese housing crisis. Hope that helps.
@jackjones4824 According to Peter he estimates that the fallout from this is going to be worse than '08. I am actually stating that I think it would be equivalent or less than the crash of '08. So technically agreeing with you.
You make some good points, the unrealized loss is mostly held by households right now and when it is realized it will reduce household networth. The percived need for bailout will be from the CCP to thouse households and particularly to their retirement nest-egg that the housing represented. Either that bailout can come in some form of alternative household networth (like a proper old age pension) or in some form of home value proping up. The later is more likely because it would allow the whole construction racket to keep going and that is a big part of GDP and local government revenue that the CCP will not want to lose.
@@kennethferland5579 Thanks for adding the additional information. Your points would make a bit more sense as to how it would have a more significant impact. I need to read into the local government revenue bit more as I do not known about the exact specifics of how their property rates and tax system works there.
since when can you "buy" property in China.
unless something has changed lately, you can only lease your house for 70 years. then it either goes back to the state or you "re-buy" it.
The thing that boggles my mind is that Chinese do NOT own their own homes. They are effectively leasing it. The developer leases the land for 40 or 70 years and from the moment of purchase, the clock is ticking, so that if it takes a developer 5 years to build the property, the [person who 'buys' the unit, only 'owns' it for 45 or 65 years. This should lead to a massive DEPRECIATION of the home, but until 2022, units appreciate in value for absolutely no rational reason. Further, nobody really knows what happens after 70 years because there are no buildings that have survived that long... Tofu Dreg construction is so rampant that buildings often start falling apart even before they are finished let alone last even 40 years. It truly is a Dutch Tulip market.
I'm curious about the connection between China's imminent housing collapse and the Belt & Road Initiative. Will the latter help to soften the blow of the former? Will debtor nations renege on their obligations? I feel like Peter Z. has talked about this in the past, but this vid brings that back into focus for me.
China is propping friendly dictatorships and corrupt leaders. Those will stick up for China. If China keeps committing crimes against humanity and wolf warrior diplomacy, however...Well when some nations start sanctioning China! What better way to sanction someone, then stop paying your debt?
Belt & Road Initiative is a dead end. Too many countries with instabilities. The route proposed in the last G20 seems more promising
There's already a lot of criticism among Chinese themselves about all the BRI-related loans to other countries when they could be investing at home. There's a reason Chinese-language media doesn't talk about how much money is being spent on foreign aid.
Source ? Proof?
@@alex_tahitisource ?
I feel like Peter didn't even touch on one of the most crucial aspect of this housing overbuild; many, many of the buildings are BULLSHIT made out of cardboard and dirt cement that regularly crumble into rubble!
Because nobody's living in them and for the most part nobody even looks at these things except as figures on a sheet, there's no incentive NOT to be corrupt in an already corrupt system...
So when he says "These assets are worth maybe a quarter of their value" my guy, you're just talking about the pure economics of the situation - the truth is that a vast majority of those assets are worth NOTHING!
Actually these developments have a negative value cuz remediation is needed to use the land for any other purpose. But maybe the CCP’s maritime imperial plans could be used to clear the rubble piles resulting from their ongoing construction failures. Projects built over time will collapse over time - the CCP/PLA can dump each yr’s rubble on one of those fake “islands” in the S. China Sea, the Law of the Sea Treaty to the contrary, notwithstanding 😅
That's florida not china . Wrong country
My left ear loves this. My right ear can't hear anything.
The main takeaway from this video is this: The Chinese threat isn't nearly as existential as mainstream thought perceives it to be and the over emphasis on India, as a China counterbalance, is not necessary. West needs to pull back from its excessive enthrallment with India. It will only create a bigger long term problem.
China is best nation though
Beggar spotted
Thank you for an amazing description of how several areas are converging to create a never before seen financial disaster. All dictators should take note that free societies work better, not perfectly, just better.
A lot better.
Dictatorships always have an expiration date.
They don’t work better, for being a little emperor, and stealing the wealth of the people.
The point is that it does not work better for the dictator himself
Source ?
Large-scale ghost towns built by China also exist in Malaysia. I think pointless ghost town plans that cause trouble to other countries are more problematic.Then, a high-speed railway was completed in Indonesia, which is inconvenient and difficult for people to use.
Also very long delayed and still full of questionable build quality along its whole length, even when only connecting to the next major city over.
I remember I was travelling towards Jiangsu province (nearly 3 hours fast train from Shanghai). I was shown rows and rows of empty apartments. It wasn’t looking like they are built in economic centres. Even in the middle of Danyang city (a lower class city in Jiangsu) there was a new public service building (government admin) that was still empty they say - it’s coming, it’s gonna be full etc. I only think about the people though - the regular person trying to get ahead. I hope it’s not a crash landing.
I always like to watch Peter hiking and the different mountain and forest scenes.
Canceling business innovation cycles is destructive in any country and political system
That's usa collapse
The Chinese government doesn’t allow you to buy property, instead you are buying a 70 year lease, after that the government can take the property
Almost the same anywhere else that one goes only if you don't pay your property taxes, the government can take it from you. No one ever actually owns anything, we all just lease. Consider it this way......we as a human species are controlled by whomever figures out how to do that and are like toilet paper, good for one use, then flushed.
@@michaellane1316technicality matters, sure it looks the same, but the core principle is different.
@@HoangTran-wu6setechnically, if I have to pay someone money every year to continue living in a house, that's rent, not ownership
@@crusherven taxes is A LOT different than rent, that’s quite a narrow and one sided view. It’s more than just like rent where you pay the landlord just to live there, you get many benefits just from being citizens of the country you are living in, some you don’t even notice cause it’s subtle. It’s more of a deal between the citizen and the government. You don’t get much of anything from paying rent to the landlord other than permission to live there, it’s not like they gonna use that rent money to help your life like improving facilities around the house and you don’t call the landlord when someone break into your house.
@@michaellane1316 the difference is that if you manage to pay it off then it’s yours 100% and you can keep a property for generations in your family unlike in China
Hate to burst your bubble, but that is happening here in the USA as well, just a little different. Instead of building massive building daily that nobody occupies, we allowed companies like Zillow, to purchase their own listing and allowed them to sell that listing for over double what it is actually worth. Combine that was abhorrently low pay, and that's how this housing market crisis in the US started.
Great morning talky stuff. Upbeat, lean, informative, and global. Thx
Fantastic update! Thanks for putting things into perspective!
Source m