Part of the problem with any US high speed rail is that Americans like rail in the first place. In California they expected a significant amount of funds to be private investment but of course Americans won't invest in rail, they would rather wait in hours of car traffic than take a train. And what is eminent domain harder to win for rails than a highway?
@@danielscalera6057 because rail costs too much and is inconvenient. It never covers it's operating costs and is a constant drag on the taxpayer. Stealing land from the people by the government isn't popular here.
@El Patron Points that can be better made about roads for cars. Driving your own car is convenient until you are stuck in traffic for hours because everyone else has the same idea. Rail costs much less per mile than roads in building and maintenance so the money issue is just car minded people like you looking at road infrastructure as a necessary cost while the relatively smaller cost for rail infrastructure is an unnecessary excess. Rails also take up less real estate than another highway so rail should be better for people against the government seizing land
So stock valuations are in a bubble but art valuations which have increased even more and have even less utility in a market crash is worth investing in... seems legit. Normally I have some respect for you. I think your analyses are well reasoned and well researched. However, it felt like you were just reading for a script. 3:20 It makes no sense that you can invest in these artworks for a "fraction of what they paid to purchase." I think what you mean to say is you can purchase a fraction of the artwork at the prorated price.
dude, art is an investment to laundry money and has the same value as buying a collectible car. Rich people buy art because it also has lots of tax benefits and exceptions.
Agreed - Something seemed amiss here. An entity decides to sell a masterpiece. They enlist a prestigious auction company, such as Sotheby's. Masterworks would be one of the bidders. If Masterworks outbids the mega-millionaires, do they then hold on to the artwork, hoping to command a higher price at an undefined future date?
It looks to me that the billionaires are trying to get rid of their junk or maybe it is just a scam? Remember the vintage wine scam from the last crash?
The train line to Xinjiang province wasn't constructed to profitable, it's more of a geopolitic play, that area is problematic to the chinese goverment.
Same as the US in the same period. It created a Boom-Bust cycle that rippled around the world as foreign investment firms took enormous losses. Then of course came consolidation and monopolies with our "Robber Barons". This was facilitated to some extent by Abraham Lincoln, a railroad Eminent Domain lawyer before his rise in politics. His mandate all rail be of uniform gauge was to create efficiencies but it also allowed to big fish to gobble up the little fish without hesitancy. Making a small regional railroad less profitable was fairly easy for the Barons.
@@selassietetevie4966 - Understood. I was referring to Bevan's historical statement and the US equivalency at that time. China is a very different situation. How they balance the books will be interesting to watch.
@@selassietetevie4966 your right it’s not, it’s in a bad way and they hide it from the public. The debt is insane, we will see if they are able to balance as economy slows down.
@@dennisfahey2379 this is way different USA , china did this in 15-20 years compared to USA having major railways since 1930s, US had much more time to recoup, china wont have this time as thier economy is going down hill fast!
I find it rather laughable that the author laments that China spent $2T on HSR and deems it all "unprofitable". The United States spent $2T on the "war against terror" in Afghanistan. I think that had the US not invaded Afghanistan and spent $2T on HSR, albeit even building HSR to "Wyoming" as he puts it, the US would have been 1000 fold better off than all the money wasted in Afghanistan. Oh, by the way, the US is on track to spend another $8T over the next decade on defense but can't find the guts to spend $2T on infrastructure over the same period. Sorry, the Chinese are on the right track (pardon the pun). In any case, since the PBOC is the issuer of the currency, to whom are these "debts" owed? It is a non-issue. So the government incurred a debt. So what?
I really enjoy the channel and often watch the videos during lunch break. However, the recent addition of in-video sponsor content is a major pain point. The sponsor content is too long relative to the overall length. Also, I would appreciate if the sponsored content is clearer highlighted to be better distinguishable from the rest of the video.
@@manschooled227 Not sure if you are sarcastic (joking). It's ok to make money on RUclips. I just think that this specific version is a bit too intrusive/much.
Of course, China is massive land mass. Rail is much more efficient transport for vast spaces, clean (environmentally) and highly scale. Think railway of Europe... helped Germany recover too.
There's a misunderstanding here: public infrastructure doesn't LOSE money, it COSTS money. It doesn't need to break even just like you don't expect the military to break even.
A government building railways should theoretically count not only the direct profits it may itself receive from fares but also any positive externalities to people and companies. However, even on this metric many of China's later high-speed lines don't make economic sense. Also, it makes sense that the most direct beneficiaries of railroads, i.e. passengers (or businesses using rail freight), pay a lions share of the cost; therefore the profitability of the venture gives at least some indication whether the investment makes economic sense. Additionally, even with beneficial infrastructure projects the government must consider whether it can actually afford them without facing solvency issues.
That's hardly justifying it. You wouldn't build a $9 billion airport in Wyoming because even if the population grew 900% in the next 20 years it would still be overkill. China has done just that with rail.
@@AwesomeTea That same analogy can be use for Interstate highway. Do you think interstate highway make profit? NO. So why the government build interstate highway in the rural region?
@@Fauzanarief-n7i The system is scaled. We don't build mega 8 Lane roads with $3Bn exchanges and service facilities in small towns that can never hope to utilize even 5% of it's capacity. China can use much cheaper and accessible solutions in these areas. Maoming doesn't need a bullet train to Guangzhou that costs 2 days salary to ride. A simple light rail line would be good enough in terms of speed, very affordable, and would also have dual use capability for cargo trains.
@@Fauzanarief-n7i A project doesn't need to make profit, but it cannot also cost 1800% more in maintenance than it can collect in ticket sales unless it's absolutely critical. Other projects like the Three Gorges Dam lose money but manage to recoup a good deal of their operating expense and are vital to national security and energy security. A bullet train from a third tier city to a second tier city just bleeds resources for little benefit to residents of either location.
Alternative investments like fractional art seem inappropriate and felt really off brand for WSM :/ I hope you get a more productive and non-speculative sponsor soon
Rail is more expensive than airlines for overall country. Look at what California has been trying to do with a rail line. Over a 30 year payback period and that is in an optimistic scenario.
@@tomy3116 Only place that makes sense is East Coast in US in Northeast. Europe the other that makes sense. You need population bases that are not that far away for it to make sense.
The profitable ones run through the most densely populated areas of the world. I think the math was that for every mile of rail there must be 10,000 people within walking distance that can easily afford the ticket. Ergo, China has more HSR than all other states put together, and is also the least popular. While Japan has the oldest and most progitable HSR.
@@accentedwanderer8623 liars burn in hell. We have more miles of paved road than any other country in history and more miles per capita than most if not all states. High speed rails are aldo mot profitable here due to the widely dispersed population
Put things into perspective 8.2 trillion spent, China has built infrastructure throughout there country 8-10 trillion spent, USA has nothing to show but 20yrs of war in the middle east
I guess you weren’t paying attention, more then 8.2 trillion spent on infrastructure that is costing the local governments more and more as we speak. That’s what you meant to say, the true perspective. Building for the sake of building isn’t exactly a smart idea.
@@rickjames18 do you think that 8 - 10 trillion is paid off haha, it will cost the people for decades, with inflation, get ready to pay $50 for a loaf of bread lol
@@MrJustin259 Nope but it's not growing as fast as the Train debt it. The domestic debt alone is 300% of GDP and growing to insane numbers. CCP debt is going to be out of control soon. It will make that 8-10 trillion look like pocket change. Why don't you try reading up on CCP problems as I know they like to hide the truth.
@@MrJustin259 Stop watching so much TV. 2 trillion spent in wars which means you have no idea what you are talking about. Lay off the liberal documentaries.
This is what is stupid about this analysis: this video only looks at HSR from the profit-loss side of the standalone project itself. It doesn’t take into account that while HSR may be a loss leader, its implementation allows citizens to travel much more efficiently, especially for work, which helps the economy. It also allows poorer regions like Xinjiang and Tibet to experience some of the economic growth that Eastern China experiences while also uniting the country as one. Contrast that with the USA which has hollowed out the economic activity of the “flyover states” to give preference to the coasts. That’s supposed to be better?
Rails in remote areas are either made for military requirements or incredibly subsidized due to non-existent demand. There are no economic benefits even in the long term
The difference is that the US is building high speed rail which is more expensive to build and maintain. The only reason they are building HSR is because they want to show off how technologically advanced they are. A normal train would work fine.
HSR, the most latest in the world, Powered by COAL that is now more expensive then a few years ago. Also thanks to the loevely wuhan batsoup virus. don't think many people are traveling inside these HSR anytime soon. Also these HSR are only for passengers transport, which I don't you can use to transport, let say, raw materials?
The rails in China are very good, very comfortable and relatively cheap. Easier and quicker than boarding a flight. Too bad there was so much debt needed to fund it
I don't like the CCP but infrastructure debt is the best kind of debt. Personally i would love the U.S to have this kind of debts instead of industrial military complex debts
@@Commievn THANK YOU! Infrastructure debt is the best kind of debt! As your currency inflates the debt gets cheaper, but the result is an economic multiplier. Compare that to consumer or military debt which gets pissed away for little to negative benefit for society. Just imagine what the US would look like now if instead of borrowing and pissing away 2 trillion dollars in Afghanistan with nothing to show at the end but a bag of shit, we instead used that money to modernize our infrastructure.
@@goste4 Yes 100% I just wanna clarify why i hate the CCP. Not because they are "Chinese" or "communist" in fact it is the opposite. The CCP is a crony-capitalist group with lots of nepotists in the high-ranking positions. They talk about "Serving the People" or "for the social and benefit of all" but in practice the powers and wealth are highly concentrated in the few elites, just like in the U.S.A. But at least in the U.S, everybody knows it is a capitalist country and there are plenty of free press and oppositions to power-check each other while China is disguised themselves as "socialism" and "serve the people" yet absolutely control and suppressed everything... Tho the CCP has improved a lot since the Jiang Zemin era. As long as they can get rid of cronyism and nepotism in the CCP as well as be more transparent about the public funds and officials backgrounds (bank accounts, relatives, experiences and degrees etc) I might support them in the future.
That is not the point, nobody said that they were uncomfortable or expensive to ride. The thesis here is that the profitability of the more recent lines are more and more insufficient to repay construction costs, thus they become a net drag on the overall system as more and more resources are used to pay off the accumulated debt on non performing lines.
rail lines are infrastructure that should not be categorized with private investment. This should not be looked at as a loosing proposition because it is for the people. Furthermore, it should be placed on the burden of the people through taxation. Spread the burden among the people of China, then the railroad will be ok.
A rail line no one uses is for which people? Build utilities to meet existing needs not the possible needs your fortune teller says may exist in future.
in normal circumstance you are right, but not this one, by issuing incredibly enormous gigantic large amount of debt to build a infrastructure that only few people use, you cause inflation, decrease purchase power, lack of funding for other more critical public services and infrastructure, causing waste of resource and etc etc...the railway need to maintain, it require huge amount of fund too, because of only few using it, they need to issuing more and more debt, and this cycle never end, so the debt crisis are invertible. China all of this just for GDP number, because government spending are GDP too.
@@dejavucmail8176 There are a lot of projects that are considered "failed projects" that many governments engage in. If it is for the people, then it is considered a wash. There in is nothing wrong with failing something for the people. There is a problem if the project is private and then the people are made to foot the bill.
@@thisisyourtransmission if these infrastructure adding economic value to it's society, then profitability is irrelevant, but these meaningless mega project extract value from society, which is not good, these hsr need vast amount debt every minute to operate, and this doesn't include the maintenance cost,.which is a cost far higher than construction cost, this requires debt too. Under these circumstances, how can you justify China hrs project.
@@thisisyourtransmission when you overprinting ungodly amount money to fund a project that add no benefit to economic, the people still pay the price, by inflation, decrease purchasing power of its money, lower quality of life.
The US built highways because their growth and city planning was inextricably linked to the car and oil industries. High speed rail makes a lot more sense as it’s more environmentally friendly than planes and cars minus the cost of construction.
Not a good analogy. Unlike roads which serve many useful purposes for many people (and government) for many years. High speed rails in China (except Beijing-Shanghai) are a big mis-allocation/waste of money and resources. It neglected expanding the traditional rail transport system where freight can be transported cheaply, and things such as coal are inefficiently transported by trucks to the power plants. Also, electricity for the high speed rail in China comes mostly from burning coal. In Japan, high speed rails is sustainable where the routes cover over 50% of the population in relative short distances and with the funding from numerous shops in and around the stations operated by the transport system. It would not make sense in the U.S. due to its vast territory and wide dispersion of people.
@@DanKann86 China is 25 times the size of Japan so that’s a bad comparison. The US could have high speed rail if it wanted to but it’s still suckling on the teat of the oil industry. Plus it’s on its way out anyway
@@jonny5777 You don't seem to get it. Land size is a major factor against China, particularly in the inner regions where high speed rails are built. The system is extremely costly to build and operate/maintain. Japan's population is heavily concentrated along the routes in relative short distances. Their incomes are also much higher. Only the relative few well to do in China use high speed rails. This is a simplified basics of high speed rail economics. The system does not have the overriding merits nor is it economical in the US yet, otherwise there would be investors developing it already even with possible support from government. That has already been studied and considered by investors. Maybe possible some times in the future. Again, electricity is largely produced by burning coal in China. Large/mega projects (huge dams, high speed rails, south-north canal, vacant airports, Olympic Games, etc) in China are used as vehicles to siphon money to CCP officials and their friends and for political image. All the rich in China are party members and those with close ties.
Debt on high speed rail that is close 2 trillion dollars and climbing is a smash up waiting to happen. A grow or die standard can only result in disaster. The same applies to real estate development and other sections of the economy. It's going to come down with a thud, and it won't be pretty. This is a mis-allocation of resources on a massive scale.
you guys literally forget about 6 Trillion dollar debt on war on terror. Those war are achieve nothing but destruction and also wasting taxpayer dollar on something useful, In put that to a perspective, 6 trillion dollar are more than Japan GDP (world 3th highest GDP )
It's almost as if the last ten years of investment-driven growth has funded projects that may never generate any real economic returns. Wouldn't that be something?
The CCP is not worried. It can always strong-arm local developers and suppliers to finish some of the construction projects on hold due to financial problems.
The question is though that if these are bleeding money can they afford to build these projects with somewhat descent quality, or will they build junk that will become absolutely useless within a few years?
China does not have any long term problems. The railroads and homes are real assets. In time the empty homes will be occupied. It takes time for people to relocate. Chinese debt is nothing compared to US debt and the Chinese use debt to build things rather than destroy things. The real wealth of a country is their assets, homes, industries, transportation etc.. How they are valued is imaginary wealth. Much of US wealth is based on useless assets, gambling, advertising, sexual portraying of women etc. The advertising is an expense, a burden on the economy and not a asset.
You are absolutely right all these are assets for future uses rather than US just keep printing money 💰💰 the world must be fools to keep recognize it's value
The Chinese strategy is more akin to having expensive, large highway access from every major city to every bumpkin town. Most nations use in-between solutions to save costs. Chinese HSR tickets cost the same or more as flight travel in many instances and most people just use buses or plane travel because its more affordable.
Excise and sales tax on gas/diesel more than pay for the highways. Then add the sales taxes on the fright carried on the roads and you are very profitable.
@@AwesomeTea Not true. HSR tickets are usually one third of the cost of air travel for the same distance. The travel time is around the same (when you include transfer to and from airports, security, check ins etc.) for distances up to 1000km and the comfort is much greater.
It wasn't economic miracle. It was theft, espionage, slave labor, and other means. You wouldn't call drug cartels legitimate business corporations. How money is made matters. Love your work.
@@karenwang313 You care, Karen. Care enough to spread your propaganda about the Paper Dragon. The one that steals everything it can and still f*cks it up! China creates nothing of worth, has nothing of worth (except cheap slave labor), and is worthless. Sorry, Karen. China's corruption and destruction of its natural resources are ensuring China will never beat America, in terms of economic power, in our lifetime.
Of course is economic miracle and China had followed the Asian Tigers and Japan before. Sure some theft, espionage, i am sure... slave labor, sorry that's US history. Fact is USA outsource much to third world... like financial services & IT / software to India and manufacturing to China that you see now what happen. Already largest US firms are led by Indian-Born talents, and manufacturing knowhow by the Chinese. Question, what is USA doing to retain these capabilities for its people?
@@cooper1819 Indian born talent? You mean the same people educated here in America? If America "made," you're no longer "Indian talent." You're (they) a product of American institutions. Stupid argument. Cherry picking some companies is pointless. As for slave labor, you're delusional. Outsourcing for profit is NOT the same as slave labor. American companies are NOT responsible for regulating Chinese problems like slave labor, pollution, etc. So yes, China did not experience an economic miracle. To say they did, it implies China innovated, created, managed, regulated, all things that lead to stable economic power, beating the odds on somewhat fair terms. They didn't! & that's why they are crashing and burning. They are like the guy that wins the lottery and is broke 5 years later, bloated & in debt.
The CCP ascribes much of China’s success in the last 20 years to the practice of building infrastructure first. All the fast rail in western China is foundational to the Belt and Road Initiative. So it’s money losing now, but in 20 years it may be regarded as the foundation of the greatest trade corridor ever built.
@@axellacaze9115 A new record has been claimed for the fastest freight train in the world. The Chinese train manufacturer CRRC Tangshan presented its new bullet train, designed to carry cargo at a speed of 350 kilometers per hour.
Even if it doesn't (which I dont think), the chinese have already achieved the strategic objective of building this hsr. & that is to integrate Xinjiang with booming areas in the east. This has prevented rise of any secessionist movements there which some countries desperately wanted.
China's GDP is about 14 trillion US dollars. So the railway debt, it will be only 14% of GDP. National debt is 7 billion US dollars. So total government debt including railroads is about 64% of GDP. In comparison, Japan's ratio is 254%, Singapore's 154%, Italy 155%, US 133%, UK 104% and China's growth rate is higher than that of G7 in general. So while debt is a matter of concern, it is not of alarming proportions.
@@neovenom9833 absolutely. Poor quality, however, is not Chinese feature per se. Construction quality in India and South Korea also has been in many cases appalling, resulting in many accidents.
Wrong. You're talking about gross debt. Singapore's net debt is zero. This is why its government bonds are highest rated (higher than US,UK,etc) . Another reason why the comparison can be complicated. A lot of Chinese debt is hidden. it's basically the guarantor of many debt ridden state companies. Chinese corporate debt is 160% of GDP compared to 88% in US.
@@Anurag-xe2jp Yes, I compared gross debt and it is OK to do so. You can also compare net debt, it is also OK.State owned companies debt is sometimes included in gross government debt, sometimes not, so definition of those liabilities may also differ between countries.
Most of the dept is also hidden by being state dept, not federal dept dispite the federal government stilling bing on the hook for that dept@@Anurag-xe2jp
The question is what China will do after their economy fully collapses. They've been preparing for war for the last 20 years, is it far-fetched to imagine them going into the offensive once their regime starts breaking down?
Yes, will be far-fetched. I see that if China fails, the leader lost mandate of Heaven, someone else will take charge and create another rise. Look at who been successful and evolve accordingly. That's what China been doing for centuries. Even current economy boom was after her leader Deng travel and saw successes of Asian Tigers and copied their models.
It’s already been proven they won’t generate a significant amount of economic growth in the US since our transportation venues are already mature. even in China many lines especially in rural areas are actually damaging
@@samuelglover7685 It's not rotted out or decrepit, We have a brand new street car network here "Seattle Streetcar" and brand new light rail network "Sound light rail" so it is not what you think. It is just that people live in private homes so have room for many cars and want freedom to go where ever they want, just a deafferent mentality.
the one who suffer from this debt bubble is the one that give cina money ! cina don't bother if they cant pay their debt . it's not cina's loss , it's the investors & lenders loss
It does make a whole lot of sense. Infra debt is good debt and that line may usher in prosperity ti xinjang province. Shortsighted thinking that already dense areas need more infra. WRONG. That just exacerbates the beachhead effect. Areas of unrealized potential need infra.
Public transport is not same as Real estate. Public infrastructure can return up to 500% in economic growth. Individual bureaucrats might be stealing off the top while creating high speed networks. Furthermore, CCP might be getting a little greedy and not calculating real increase in productivity. However, competent Leaders can’t screw up 5x returns. The best and worst aspect of China is that it’s a great corporation run by brilliant CEO’s.
Stated numbers say that one person in 700 in China works for the railroad. Countries get away with prestige projects on a small scale, but massive projects better be running a profit (or at least not a loss), otherwise it's a huge welfare pyramid scam, and it will end badly. But, yeah, sometimes the value does appear in other ways. For instance,moving people around may make for a more consistent society, which may actually be the goal.
@@geraldfrost4710 if by profit you mean increase economic productivity. Which is the only profit state should be concerned with when creating public infrasture; then yes. If your advocating for toll roads and transportation fees then that is counterintuitive.
@@angelperez3750 Toll roads are a pain to the user; you won't catch me advocating for them. No, I'm rather more cynical. It is in any government's interest to make it's population more wealthy. Such a population is wealthy because it has created wealth. Such a wealth creating population can be taxed in multiple ways. Poor people? not so much. From a government's point of view, a billion middle class citizens is better than a billion poor citizens with a thousand rich people scattered in.
2 trillion, exaggeration. Good thing, its subsidies, tax payers, attested by private and Public sectors and numerous taxes that protects the economies from added poverty of any BAIL OUT. Investments are investments and not CAPITALISTS.
They want to build these high speed trains in my home country of Sweden too, but I'm opposed since it seems to be more of a vanity project than a sound investment. The cost is too high, the time saved is little, and there are too few passengers.
How many population in Sweden 🇸🇪,if over 300 million peoples you may need its.Laos now got bullet train their population only 3 million lives but The China offers them on the loans and hardware and connected the two for Chinese benefits Lao are land lock
Yes it's about money. Your analogy doesn't hold up, since you can provide the same service (transportation from a to b) in a similar time with air travel for a fraction of the cost. It's another thing if you remove the service all together with no alternative like in your example.
Governments are not corporations. Making profit is not their primary goal. Making peoples’s lives better is the objective. The train to Xinjiang might be sparse most of the time, but when they need it during major Holidays, i.e. Lunar New Year, it is essential.
I lived in China. They offer tickets at very competitive rates because its a benefit to society. Looking at everything with a USA perspective will be difficult to understand chinas ways. Either way, they are way ahead in rail and can sell them globally as UK and USA did in their industrial age.
China government is the biggest company on earth. they own utilities and a large percentage of all companies. Chinese people SAVE because the banking system actually has an interest rate unlike USA. liquidity is high even for factory workers who generally save money. Compare that to USA..
@@davidhynes If china stopped supplying your country and they took your advise.. You maybe realize how idiotic that statement is. Compare the poverty of china and india. India is high poverty levels and china has hardly any.
@@alimfuzzy Given the population of China, it is. It's working everywhere in the world (but North America), it will pay off eventually (maybe not the one to xinjiang though).
China has a huge population concentrated in Eastern side which need to be spread across country for political and economic reasons. China will endure the population is dispersed to the required areas by ensuring industry is developed along the rail line and they have political will to do that
@@harshitmalhotra8627 Yes, you're right. The status of US dollar as the Most stable and strongest currency in the world is still in the record. US dollar is still used as a reserve currency for global trade and finance.
Notice how the US has inflated the usd like mad Men since 2019? Lots of distractions but also remember trump was against China and he held office for 4 years;)
Look, except for the Belt and Road initiative, all the money were spent within China, benefitting China, not fighting useless wars overseas or having 800 overseas bases like USA.
"Detroit to Wyoming" Ironically in the United States, you are aware aren't you that it was the railroads that hyped and built lines to national parks such as Yellowstone?
Except it was private companies making speculative investments, not govt pouring hundreds of billions on unprofitable projects for the sake of short term GDP growth.
@@Fauzanarief-n7i the problem is there are hidden costs for China such as expensive maintenance costs and their bloated railroad agency in addition to billions of $ in interest payments that have come due. It's a money pit for the CCP.
The fast train service in China is a very popular service. Traffic increases in double digits every year. Spin off economic benefits run into hundreds of billions.
Right, average little investors should hedge your risk by investing in art. 🤣😂😆At least art pays for my viewing of this content. 👍 I love your contents, BTW.
It's a bubble when you build too vanity projects like high speed rails, even in places where it doesn't make sense to do so. High speed rails cannot accomodate freight trains and their utility dries up when there aren't enough passengers. The shortage of freight space has gone bad to a point where the prices for freight trains have surpassed truck transport prices per km travelled, which doesn't make sense because trains are supposed to be much much cheaper than trucks for long distance hauls
@@xiuxiu1108 No. A vanity project is when you blow up 2 trillion dollars killing thousands of innocent people in Afghanistan. When you use that money to build something beneficial for economy and something people really need like HSR then it is called "good governance"
WSM, your wrong. This is a long game great investment, nation building, low carbon transportation. Plus they can leverage export the HSR industry to the world which desperately needs the low carbon transportation. And 50% debt to GDP ratio is less than half that of USA with a growing versus stagnant economy, and well positioned for future.
This railway debt is not real issue for China, as they can "sweep them under rug", like USA print money to address it. It supports local economies, employment rates - is that not what most governments especially in rich west does? Seriously... subsidize public transport. Most importantly, money is not borrowed - no foreign debt, just left hand to right hand. And now they realize and start to clamp down... next would be cost cutting initiatives, like how any major corporate would do. It's an issue but just normal finetuning, at national scale of China. They will likely look into other public transport operating models in the region to maintain the infrastructure... like Hong Kong, Taiwan or Singapore's rail systems... just at super scale.
hey ,,, so for reals, how trust worthy is that master works thing ??? i ask because there was bs thing a couple of years ago where you invest in "supposively owning" gold as a group but it was a scam T . T .... trustworthy or not ?
Don't let the advertisement fool you. Luxury goods always tank in a recession/depression, and fine art is a luxury good. Would you buy shares of an expensive mega-yacht when you're afraid that the stock market will decline?
Yes, it is a huge waste. However, it pales comparing to US war spending. At least, the HSR is there for people to enjoy but the war left people dead. Lessons to be learned.
The analysis today was incorrect. China considers infrastructure a part of national security to homogenize wealth distribution and cultural identity. Xinjiang has history of separatism and terrorism and infrastructure projects are the "carrot" to the re-education camps that are "stick." You wouldn't ask if the Dept of Transportation, Iraq war or if the Defense Dept is financially viable. Moreover, these are longterm goals with projected benefits in the 25 year range.
That's a bunch of regurgitated rhetoric that means nothing and contradicts basic math. The HSR losses are so severe that railroads raise the prices on freight shipping to the point that it is cheaper to truck across China than to ship it by rail. Raising ticket prices won't help as the target demographic can only pay so much and will simply take a bus if ticket prices are too high. In order for HSR to be profitable, every mile must be surrounded by a dense population within walking distance that can easily afford the ticket. That's why the oldest and most profitable HSR is in Japan. And yes, there were geopolitical strategies involved. But as with the exotic ideas of all politicians it is unclear if the sunk costs did anything at all to prevent the resurgence of warlords. Just as it is unclear if there were ever any significant amount of Islamists in Xingjiang. E
@@samsonsoturian6013 still, even the premise that "China has 300% debt-to-GDP ratio, making it one of the most indebted major economies" is totally wrong, because that's the total non-financial debt-to-GDP ratio, which comprises of government, household and non-financial corporate debt. The equivalent number for other large economies at the end of 2020 are 360% for US, 335% for Canada, 305% for UK, 245% for Germany, 410% for France, 505% for Japan. There is no simple Google search to find these numbers, so I had to add the public and private debt from each country, but the individual numbers are all easily verified.
Make sure to check out Masterworks, the only platform allowing ordinary investors to invest in blue-chip art: masterworks.art/wallstreet
investing in art isnt democratizing it
The ad is longer then the video give me a break
Can CCP successfully restructure the chinese economy? Or are the chickens coming home to roost ?
I am happy for you that you got a sponsor and your channel is finally getting the attention it deserves.
Greetings from germany :)
Congrats on getting a good sponsor
Dude, 1/3 of the video is a ad
There's no free lunch
Don't sell out to shady "alternate asset markets" scammers. Sorry, I mean investment management specialists.
Next week: invest in high speed rail by our sponsor, it's art that presents the systemic risk!
Waiting for him to shill NFTs next.
Remember investing in wine......and whiskey? Hmmmmm!
@@davidjma7226 It's kind a blur actually
Still better than California's rail debt. We spent $30+bil to build nothing.
It's amazing how every single stretch of the line house values increase tenfold or something before their imminent domain... 😭
Better than Houston Texas also
Part of the problem with any US high speed rail is that Americans like rail in the first place. In California they expected a significant amount of funds to be private investment but of course Americans won't invest in rail, they would rather wait in hours of car traffic than take a train. And what is eminent domain harder to win for rails than a highway?
@@danielscalera6057 because rail costs too much and is inconvenient. It never covers it's operating costs and is a constant drag on the taxpayer. Stealing land from the people by the government isn't popular here.
@El Patron Points that can be better made about roads for cars. Driving your own car is convenient until you are stuck in traffic for hours because everyone else has the same idea. Rail costs much less per mile than roads in building and maintenance so the money issue is just car minded people like you looking at road infrastructure as a necessary cost while the relatively smaller cost for rail infrastructure is an unnecessary excess. Rails also take up less real estate than another highway so rail should be better for people against the government seizing land
So stock valuations are in a bubble but art valuations which have increased even more and have even less utility in a market crash is worth investing in... seems legit. Normally I have some respect for you. I think your analyses are well reasoned and well researched. However, it felt like you were just reading for a script. 3:20 It makes no sense that you can invest in these artworks for a "fraction of what they paid to purchase." I think what you mean to say is you can purchase a fraction of the artwork at the prorated price.
dude, art is an investment to laundry money and has the same value as buying a collectible car. Rich people buy art because it also has lots of tax benefits and exceptions.
That was literally an Advertisement. It really should have been marked as such.
It was an advertisement and today's art is just a mean for the riches to laundering big bucks.
Samething with NFTs and bitcoins
Agreed - Something seemed amiss here. An entity decides to sell a masterpiece. They enlist a prestigious auction company, such as Sotheby's. Masterworks would be one of the bidders. If Masterworks outbids the mega-millionaires, do they then hold on to the artwork, hoping to command a higher price at an undefined future date?
It looks to me that the billionaires are trying to get rid of their junk or maybe it is just a scam? Remember the vintage wine scam from the last crash?
The train line to Xinjiang province wasn't constructed to profitable, it's more of a geopolitic play, that area is problematic to the chinese goverment.
We can only hope their political interests will turn out to cost them more than they can afford.
In my country Rebels militia always point out inequality, why they dont have railways in the rural areas.
I guess in CHina they are ahead on that.
Plus, not the whole route is unprofitable, as the train goes further inland, the less people use it.
Low quality video overall.
@Hans Otto Kroeger Kaethler Ask the Republicans who cut tax rates and cut Government revenue and yet want more shiny toys
Reminds of me of what I read about Britain's "railway-mania" of the 1840's - that did not end very well either.
Same as the US in the same period. It created a Boom-Bust cycle that rippled around the world as foreign investment firms took enormous losses. Then of course came consolidation and monopolies with our "Robber Barons". This was facilitated to some extent by Abraham Lincoln, a railroad Eminent Domain lawyer before his rise in politics. His mandate all rail be of uniform gauge was to create efficiencies but it also allowed to big fish to gobble up the little fish without hesitancy. Making a small regional railroad less profitable was fairly easy for the Barons.
@@dennisfahey2379 China is not America
@@selassietetevie4966 - Understood. I was referring to Bevan's historical statement and the US equivalency at that time. China is a very different situation. How they balance the books will be interesting to watch.
@@selassietetevie4966 your right it’s not, it’s in a bad way and they hide it from the public. The debt is insane, we will see if they are able to balance as economy slows down.
@@dennisfahey2379 this is way different USA , china did this in 15-20 years compared to USA having major railways since 1930s, US had much more time to recoup, china wont have this time as thier economy is going down hill fast!
That’s a big ad.
I find it rather laughable that the author laments that China spent $2T on HSR and deems it all "unprofitable". The United States spent $2T on the "war against terror" in Afghanistan. I think that had the US not invaded Afghanistan and spent $2T on HSR, albeit even building HSR to "Wyoming" as he puts it, the US would have been 1000 fold better off than all the money wasted in Afghanistan. Oh, by the way, the US is on track to spend another $8T over the next decade on defense but can't find the guts to spend $2T on infrastructure over the same period. Sorry, the Chinese are on the right track (pardon the pun). In any case, since the PBOC is the issuer of the currency, to whom are these "debts" owed? It is a non-issue. So the government incurred a debt. So what?
That ad hit me like an unprofitable high speed train
Ever grande is not Chinese it is from Hong Kong
I really enjoy the channel and often watch the videos during lunch break. However, the recent addition of in-video sponsor content is a major pain point. The sponsor content is too long relative to the overall length. Also, I would appreciate if the sponsored content is clearer highlighted to be better distinguishable from the rest of the video.
totally agree
I know right. I hate when people monetize their content to make money.
@@manschooled227 Not sure if you are sarcastic (joking). It's ok to make money on RUclips. I just think that this specific version is a bit too intrusive/much.
Government sees rail as strategic, like the military.
Thec PLA Ladyboys Military is a vacuum.
Of course, China is massive land mass. Rail is much more efficient transport for vast spaces, clean (environmentally) and highly scale. Think railway of Europe... helped Germany recover too.
There's a misunderstanding here: public infrastructure doesn't LOSE money, it COSTS money. It doesn't need to break even just like you don't expect the military to break even.
A government building railways should theoretically count not only the direct profits it may itself receive from fares but also any positive externalities to people and companies. However, even on this metric many of China's later high-speed lines don't make economic sense. Also, it makes sense that the most direct beneficiaries of railroads, i.e. passengers (or businesses using rail freight), pay a lions share of the cost; therefore the profitability of the venture gives at least some indication whether the investment makes economic sense. Additionally, even with beneficial infrastructure projects the government must consider whether it can actually afford them without facing solvency issues.
That's hardly justifying it. You wouldn't build a $9 billion airport in Wyoming because even if the population grew 900% in the next 20 years it would still be overkill. China has done just that with rail.
@@AwesomeTea That same analogy can be use for Interstate highway. Do you think interstate highway make profit? NO. So why the government build interstate highway in the rural region?
@@Fauzanarief-n7i The system is scaled. We don't build mega 8 Lane roads with $3Bn exchanges and service facilities in small towns that can never hope to utilize even 5% of it's capacity. China can use much cheaper and accessible solutions in these areas. Maoming doesn't need a bullet train to Guangzhou that costs 2 days salary to ride. A simple light rail line would be good enough in terms of speed, very affordable, and would also have dual use capability for cargo trains.
@@Fauzanarief-n7i A project doesn't need to make profit, but it cannot also cost 1800% more in maintenance than it can collect in ticket sales unless it's absolutely critical. Other projects like the Three Gorges Dam lose money but manage to recoup a good deal of their operating expense and are vital to national security and energy security. A bullet train from a third tier city to a second tier city just bleeds resources for little benefit to residents of either location.
Alternative investments like fractional art seem inappropriate and felt really off brand for WSM :/ I hope you get a more productive and non-speculative sponsor soon
Anyone who has travelled using Chinese domestic airlines will soon understand the benefits of the HSR. Faster, cheaper and ON SCHEDULE!
But losing shit tons of money nonetheless
On schedule to a crumbling city
Rail is more expensive than airlines for overall country. Look at what California has been trying to do with a rail line. Over a 30 year payback period and that is in an optimistic scenario.
@@Michael-ok6pe Maybe in North America, especially in California. For most of the world, rail is far more cost effective.
@@tomy3116 Only place that makes sense is East Coast in US in Northeast. Europe the other that makes sense. You need population bases that are not that far away for it to make sense.
I believe all state owned railways of all countries operate at loss, not just China.
All of them except Hong Kong's which actually subsidies' other parts of the economy.
The profitable ones run through the most densely populated areas of the world. I think the math was that for every mile of rail there must be 10,000 people within walking distance that can easily afford the ticket.
Ergo, China has more HSR than all other states put together, and is also the least popular. While Japan has the oldest and most progitable HSR.
American have no clue what infrastructure means until maybe this year. I wonder why.
Except Germany
@@accentedwanderer8623 liars burn in hell. We have more miles of paved road than any other country in history and more miles per capita than most if not all states. High speed rails are aldo mot profitable here due to the widely dispersed population
This feels like a military investment, fast travel
Put things into perspective
8.2 trillion spent, China has built infrastructure throughout there country
8-10 trillion spent, USA has nothing to show but 20yrs of war in the middle east
I guess you weren’t paying attention, more then 8.2 trillion spent on infrastructure that is costing the local governments more and more as we speak. That’s what you meant to say, the true perspective. Building for the sake of building isn’t exactly a smart idea.
@@rickjames18 maybe, war for the sake of profit might not be a good idea either, keeps happening
@@rickjames18 do you think that 8 - 10 trillion is paid off haha, it will cost the people for decades, with inflation, get ready to pay $50 for a loaf of bread lol
@@MrJustin259 Nope but it's not growing as fast as the Train debt it. The domestic debt alone is 300% of GDP and growing to insane numbers. CCP debt is going to be out of control soon. It will make that 8-10 trillion look like pocket change. Why don't you try reading up on CCP problems as I know they like to hide the truth.
@@MrJustin259 Stop watching so much TV. 2 trillion spent in wars which means you have no idea what you are talking about. Lay off the liberal documentaries.
This is what is stupid about this analysis: this video only looks at HSR from the profit-loss side of the standalone project itself. It doesn’t take into account that while HSR may be a loss leader, its implementation allows citizens to travel much more efficiently, especially for work, which helps the economy. It also allows poorer regions like Xinjiang and Tibet to experience some of the economic growth that Eastern China experiences while also uniting the country as one.
Contrast that with the USA which has hollowed out the economic activity of the “flyover states” to give preference to the coasts. That’s supposed to be better?
You can't escape balance sheets
Do most of those people travel from city to city for work? I always hear about people moving to a city so they can work there.
Rails in remote areas are either made for military requirements or incredibly subsidized due to non-existent demand. There are no economic benefits even in the long term
The difference is that the US is building high speed rail which is more expensive to build and maintain. The only reason they are building HSR is because they want to show off how technologically advanced they are. A normal train would work fine.
HSR, the most latest in the world, Powered by COAL that is now more expensive then a few years ago.
Also thanks to the loevely wuhan batsoup virus. don't think many people are traveling inside these HSR anytime soon.
Also these HSR are only for passengers transport, which I don't you can use to transport, let say, raw materials?
No problem, just build hi speed rail overseas like Laos
The rails in China are very good, very comfortable and relatively cheap. Easier and quicker than boarding a flight. Too bad there was so much debt needed to fund it
I don't like the CCP but infrastructure debt is the best kind of debt.
Personally i would love the U.S to have this kind of debts instead of industrial military complex debts
No wonder they work, overspending to build
@@Commievn THANK YOU! Infrastructure debt is the best kind of debt! As your currency inflates the debt gets cheaper, but the result is an economic multiplier. Compare that to consumer or military debt which gets pissed away for little to negative benefit for society. Just imagine what the US would look like now if instead of borrowing and pissing away 2 trillion dollars in Afghanistan with nothing to show at the end but a bag of shit, we instead used that money to modernize our infrastructure.
@@goste4 Yes 100%
I just wanna clarify why i hate the CCP.
Not because they are "Chinese" or "communist" in fact it is the opposite.
The CCP is a crony-capitalist group with lots of nepotists in the high-ranking positions.
They talk about "Serving the People" or "for the social and benefit of all" but in practice the powers and wealth are highly concentrated in the few elites, just like in the U.S.A.
But at least in the U.S, everybody knows it is a capitalist country and there are plenty of free press and oppositions to power-check each other while China is disguised themselves as "socialism" and "serve the people" yet absolutely control and suppressed everything...
Tho the CCP has improved a lot since the Jiang Zemin era. As long as they can get rid of cronyism and nepotism in the CCP as well as be more transparent about the public funds and officials backgrounds (bank accounts, relatives, experiences and degrees etc)
I might support them in the future.
That is not the point, nobody said that they were uncomfortable or expensive to ride. The thesis here is that the profitability of the more recent lines are more and more insufficient to repay construction costs, thus they become a net drag on the overall system as more and more resources are used to pay off the accumulated debt on non performing lines.
rail lines are infrastructure that should not be categorized with private investment. This should not be looked at as a loosing proposition because it is for the people. Furthermore, it should be placed on the burden of the people through taxation. Spread the burden among the people of China, then the railroad will be ok.
A rail line no one uses is for which people? Build utilities to meet existing needs not the possible needs your fortune teller says may exist in future.
in normal circumstance you are right, but not this one, by issuing incredibly enormous gigantic large amount of debt to build a infrastructure that only few people use, you cause inflation, decrease purchase power, lack of funding for other more critical public services and infrastructure, causing waste of resource and etc etc...the railway need to maintain, it require huge amount of fund too, because of only few using it, they need to issuing more and more debt, and this cycle never end, so the debt crisis are invertible. China all of this just for GDP number, because government spending are GDP too.
@@dejavucmail8176 There are a lot of projects that are considered "failed projects" that many governments engage in. If it is for the people, then it is considered a wash. There in is nothing wrong with failing something for the people. There is a problem if the project is private and then the people are made to foot the bill.
@@thisisyourtransmission if these infrastructure adding economic value to it's society, then profitability is irrelevant, but these meaningless mega project extract value from society, which is not good, these hsr need vast amount debt every minute to operate, and this doesn't include the maintenance cost,.which is a cost far higher than construction cost, this requires debt too. Under these circumstances, how can you justify China hrs project.
@@thisisyourtransmission when you overprinting ungodly amount money to fund a project that add no benefit to economic, the people still pay the price, by inflation, decrease purchasing power of its money, lower quality of life.
It sounds like a giant pyramid scheme.
The whole China is one big bubble
The US built highways because their growth and city planning was inextricably linked to the car and oil industries. High speed rail makes a lot more sense as it’s more environmentally friendly than planes and cars minus the cost of construction.
In the western parts
Literally nothing to do with the video
Not a good analogy. Unlike roads which serve many useful purposes for many people (and government) for many years. High speed rails in China (except Beijing-Shanghai) are a big mis-allocation/waste of money and resources. It neglected expanding the traditional rail transport system where freight can be transported cheaply, and things such as coal are inefficiently transported by trucks to the power plants. Also, electricity for the high speed rail in China comes mostly from burning coal. In Japan, high speed rails is sustainable where the routes cover over 50% of the population in relative short distances and with the funding from numerous shops in and around the stations operated by the transport system. It would not make sense in the U.S. due to its vast territory and wide dispersion of people.
@@DanKann86 China is 25 times the size of Japan so that’s a bad comparison. The US could have high speed rail if it wanted to but it’s still suckling on the teat of the oil industry. Plus it’s on its way out anyway
@@jonny5777 You don't seem to get it. Land size is a major factor against China, particularly in the inner regions where high speed rails are built. The system is extremely costly to build and operate/maintain. Japan's population is heavily concentrated along the routes in relative short distances. Their incomes are also much higher. Only the relative few well to do in China use high speed rails. This is a simplified basics of high speed rail economics. The system does not have the overriding merits nor is it economical in the US yet, otherwise there would be investors developing it already even with possible support from government. That has already been studied and considered by investors. Maybe possible some times in the future. Again, electricity is largely produced by burning coal in China. Large/mega projects (huge dams, high speed rails, south-north canal, vacant airports, Olympic Games, etc) in China are used as vehicles to siphon money to CCP officials and their friends and for political image. All the rich in China are party members and those with close ties.
Debt on high speed rail that is close 2 trillion dollars and climbing is a smash up waiting to happen. A grow or die standard can only result in disaster. The same applies to real estate development and other sections of the economy. It's going to come down with a thud, and it won't be pretty. This is a mis-allocation of resources on a massive scale.
you guys literally forget about 6 Trillion dollar debt on war on terror. Those war are achieve nothing but destruction and also wasting taxpayer dollar on something useful, In put that to a perspective, 6 trillion dollar are more than Japan GDP (world 3th highest GDP )
It's almost as if the last ten years of investment-driven growth has funded projects that may never generate any real economic returns. Wouldn't that be something?
Or that the growth was mainly on the balance sheet and not in real assets or productivity.
Nailed it
Sounds like you guys are describing the US military spending
Don’t say it, the .50 cent trolls are lurking around.
brilliant economic advisors...
The CCP is not worried. It can always strong-arm local developers and suppliers to finish some of the construction projects on hold due to financial problems.
The question is though that if these are bleeding money can they afford to build these projects with somewhat descent quality, or will they build junk that will become absolutely useless within a few years?
They do not worry they have slave labor people who worked months without a paycheck. It is in Winnie the Pooh's Little Red Book.
LOL, "buy art" as a hedge. No thanks.
The USA debt spending is $2 Trillion/year on the military-industrial infrastructure which no one can ride on or travel anywhere.
China does not have any long term problems. The railroads and homes are real assets. In time the empty homes will be occupied. It takes time for people to relocate. Chinese debt is nothing compared to US debt and the Chinese use debt to build things rather than destroy things. The real wealth of a country is their assets, homes, industries, transportation etc.. How they are valued is imaginary wealth. Much of US wealth is based on useless assets, gambling, advertising, sexual portraying of women etc. The advertising is an expense, a burden on the economy and not a asset.
You are absolutely right all these are assets for future uses rather than US just keep printing money 💰💰 the world must be fools to keep recognize it's value
Well, it is time to dig up all the ROADS and HIGHWAYS in the US due to it too being UNPROFITABLE.
Inside cities, yes, but not between them.
The Chinese strategy is more akin to having expensive, large highway access from every major city to every bumpkin town. Most nations use in-between solutions to save costs. Chinese HSR tickets cost the same or more as flight travel in many instances and most people just use buses or plane travel because its more affordable.
Excise and sales tax on gas/diesel more than pay for the highways. Then add the sales taxes on the fright carried on the roads and you are very profitable.
@@AwesomeTea Not true. HSR tickets are usually one third of the cost of air travel for the same distance. The travel time is around the same (when you include transfer to and from airports, security, check ins etc.) for distances up to 1000km and the comfort is much greater.
@@alexlazar4738 Timing is important. Around CNY the tickets spike and that's really the only time you'd really want to use HSR.
It wasn't economic miracle. It was theft, espionage, slave labor, and other means. You wouldn't call drug cartels legitimate business corporations. How money is made matters. Love your work.
Who cares, in the end, they became the most powerful country on the planet. They got what matters.
@@karenwang313 You care, Karen. Care enough to spread your propaganda about the Paper Dragon. The one that steals everything it can and still f*cks it up! China creates nothing of worth, has nothing of worth (except cheap slave labor), and is worthless. Sorry, Karen. China's corruption and destruction of its natural resources are ensuring China will never beat America, in terms of economic power, in our lifetime.
Of course is economic miracle and China had followed the Asian Tigers and Japan before. Sure some theft, espionage, i am sure... slave labor, sorry that's US history. Fact is USA outsource much to third world... like financial services & IT / software to India and manufacturing to China that you see now what happen. Already largest US firms are led by Indian-Born talents, and manufacturing knowhow by the Chinese.
Question, what is USA doing to retain these capabilities for its people?
@@cooper1819 Indian born talent? You mean the same people educated here in America? If America "made," you're no longer "Indian talent." You're (they) a product of American institutions. Stupid argument. Cherry picking some companies is pointless. As for slave labor, you're delusional. Outsourcing for profit is NOT the same as slave labor. American companies are NOT responsible for regulating Chinese problems like slave labor, pollution, etc. So yes, China did not experience an economic miracle. To say they did, it implies China innovated, created, managed, regulated, all things that lead to stable economic power, beating the odds on somewhat fair terms. They didn't! & that's why they are crashing and burning. They are like the guy that wins the lottery and is broke 5 years later, bloated & in debt.
@@05xavier05 Not really. USA exports education to Indians as Service and You charge money for that.Those talents are Indians.
The CCP ascribes much of China’s success in the last 20 years to the practice of building infrastructure first. All the fast rail in western China is foundational to the Belt and Road Initiative. So it’s money losing now, but in 20 years it may be regarded as the foundation of the greatest trade corridor ever built.
Facts literally what I was saying about the line connecting to Xinjiang region which is where the BRI takes place in the famous silk road
It's a passenger line, not a freight line. What good can it do to trade ?
@@axellacaze9115 A new record has been claimed for the fastest freight train in the world. The Chinese train manufacturer CRRC Tangshan presented its new bullet train, designed to carry cargo at a speed of 350 kilometers per hour.
Even if it doesn't (which I dont think), the chinese have already achieved the strategic objective of building this hsr. & that is to integrate Xinjiang with booming areas in the east. This has prevented rise of any secessionist movements there which some countries desperately wanted.
You will have to wait a lot because it will never be built
China's GDP is about 14 trillion US dollars. So the railway debt, it will be only 14% of GDP. National debt is 7 billion US dollars. So total government debt including railroads is about 64% of GDP. In comparison, Japan's ratio is 254%, Singapore's 154%, Italy 155%, US 133%, UK 104% and China's growth rate is higher than that of G7 in general. So while debt is a matter of concern, it is not of alarming proportions.
the debt is one thing, the poor build quality another. you have bridges in China that aren't even a year old toppling over.
@@neovenom9833 absolutely. Poor quality, however, is not Chinese feature per se. Construction quality in India and South Korea also has been in many cases appalling, resulting in many accidents.
Wrong. You're talking about gross debt. Singapore's net debt is zero. This is why its government bonds are highest rated (higher than US,UK,etc) . Another reason why the comparison can be complicated. A lot of Chinese debt is hidden. it's basically the guarantor of many debt ridden state companies. Chinese corporate debt is 160% of GDP compared to 88% in US.
@@Anurag-xe2jp Yes, I compared gross debt and it is OK to do so. You can also compare net debt, it is also OK.State owned companies debt is sometimes included in gross government debt, sometimes not, so definition of those liabilities may also differ between countries.
Most of the dept is also hidden by being state dept, not federal dept dispite the federal government stilling bing on the hook for that dept@@Anurag-xe2jp
The question is what China will do after their economy fully collapses. They've been preparing for war for the last 20 years, is it far-fetched to imagine them going into the offensive once their regime starts breaking down?
Yes, will be far-fetched. I see that if China fails, the leader lost mandate of Heaven, someone else will take charge and create another rise. Look at who been successful and evolve accordingly. That's what China been doing for centuries. Even current economy boom was after her leader Deng travel and saw successes of Asian Tigers and copied their models.
Dalio, there you have an excellent specimen
Run at 6% of break even capacity 😭
Railways don't need to be profitable when they create so much economic growth.
Increased tax revenues can pay down the debt
It’s already been proven they won’t generate a significant amount of economic growth in the US since our transportation venues are already mature. even in China many lines especially in rural areas are actually damaging
@@Meinan4370 那你告诉我，哪些线路没用。
@@张鑫-b9z All of them
@@Meinan4370 " our transportation venues are already mature" -- a very roundabout way of saying "decrepit" or "rotted out".
@@samuelglover7685 It's not rotted out or decrepit, We have a brand new street car network here "Seattle Streetcar" and brand new light rail network "Sound light rail" so it is not what you think. It is just that people live in private homes so have room for many cars and want freedom to go where ever they want, just a deafferent mentality.
the one who suffer from this debt bubble is the one that give cina money !
cina don't bother if they cant pay their debt . it's not cina's loss , it's the investors & lenders loss
It does make a whole lot of sense. Infra debt is good debt and that line may usher in prosperity ti xinjang province. Shortsighted thinking that already dense areas need more infra. WRONG. That just exacerbates the beachhead effect. Areas of unrealized potential need infra.
Dalio has a great track record in the past, but he is currently heavily invested into China. hahahahaha
He’s been in China since the 80s. That’s why his company is named Bridgewater.
the US spent $2T on the afghanistan war for nothing lol
"If you build it, they will come."
"...or they won't."
看了很多人的评论，其实在中国只要是有利于公民的事业，政府会全部投入去改善。这些资源都由国家机器去运转和建设，中国的能源，交通，通信，只要有一户人在。政府都会投入到方便这户人生活。这就是中国政府的做法，对于所有的基础实施根本不需要去算是否投入后产生多大的经济效益。而是先考虑这户人方不方便。所以这就是中国制度和其它民主资本国家不同的地方和做法
Public transport is not same as Real estate. Public infrastructure can return up to 500% in economic growth. Individual bureaucrats might be stealing off the top while creating high speed networks. Furthermore, CCP might be getting a little greedy and not calculating real increase in productivity. However, competent Leaders can’t screw up 5x returns. The best and worst aspect of China is that it’s a great corporation run by brilliant CEO’s.
Stated numbers say that one person in 700 in China works for the railroad. Countries get away with prestige projects on a small scale, but massive projects better be running a profit (or at least not a loss), otherwise it's a huge welfare pyramid scam, and it will end badly.
But, yeah, sometimes the value does appear in other ways. For instance,moving people around may make for a more consistent society, which may actually be the goal.
@@geraldfrost4710 if by profit you mean increase economic productivity. Which is the only profit state should be concerned with when creating public infrasture; then yes. If your advocating for toll roads and transportation fees then that is counterintuitive.
@@angelperez3750 Toll roads are a pain to the user; you won't catch me advocating for them. No, I'm rather more cynical. It is in any government's interest to make it's population more wealthy. Such a population is wealthy because it has created wealth. Such a wealth creating population can be taxed in multiple ways. Poor people? not so much. From a government's point of view, a billion middle class citizens is better than a billion poor citizens with a thousand rich people scattered in.
Begins with a 4 minute commercial trying to sell worthless paintings.
2 trillion, exaggeration. Good thing, its subsidies, tax payers, attested by private and Public sectors and numerous taxes that protects the economies from added poverty of any BAIL OUT. Investments are investments and not CAPITALISTS.
They want to build these high speed trains in my home country of Sweden too, but I'm opposed since it seems to be more of a vanity project than a sound investment. The cost is too high, the time saved is little, and there are too few passengers.
How many population in Sweden 🇸🇪,if over 300 million peoples you may need its.Laos now got bullet train their population only 3 million lives but The China offers them on the loans and hardware and connected the two for Chinese benefits Lao are land lock
Showing peloton is a bit missleding I feel like every knew that was super over priced
It's not always all about money. A reasonable analogy is: Should the US Postal service not deliver mail to small towns in Wyoming?
Yes it's about money. Your analogy doesn't hold up, since you can provide the same service (transportation from a to b) in a similar time with air travel for a fraction of the cost. It's another thing if you remove the service all together with no alternative like in your example.
I think the government is going to step in because like the big 3 in the USA during the 2008 recession, this company is too big to fail.
Not with china. They think very differently from us. I believe these happenings are just a part of ongoing in-fighting between factions.
@@nokia5359 well damn
Governments are not corporations. Making profit is not their primary goal. Making peoples’s lives better is the objective. The train to Xinjiang might be sparse most of the time, but when they need it during major Holidays, i.e. Lunar New Year, it is essential.
I lived in China. They offer tickets at very competitive rates because its a benefit to society. Looking at everything with a USA perspective will be difficult to understand chinas ways. Either way, they are way ahead in rail and can sell them globally as UK and USA did in their industrial age.
China government is the biggest company on earth. they own utilities and a large percentage of all companies. Chinese people SAVE because the banking system actually has an interest rate unlike USA. liquidity is high even for factory workers who generally save money. Compare that to USA..
Keep everything in China, Buy Made in India.
I’m sure it’s a benefit to someone… some officials with 1000 mistresses and get out of jail free card. What a joke!
@@davidhynes If china stopped supplying your country and they took your advise.. You maybe realize how idiotic that statement is. Compare the poverty of china and india. India is high poverty levels and china has hardly any.
@@rickjames18 Ok, so Hilary Clinton, Obama and the ruling class havent made millions and millions from lobbying..
China: I have 2 trillion debt what should I do?
America: Amature number, hold my money printing.
Infrastructure when thought through long term is a good investment...
Only if that infrastructure is used.
@@alimfuzzy Given the population of China, it is. It's working everywhere in the world (but North America), it will pay off eventually (maybe not the one to xinjiang though).
@@Bowlyful nah that's not true. if nobody uses it it's just a money pit.
China, please keep building. It is good for GDP growth
"building interstates-- but are they profitable"
China has a huge population concentrated in Eastern side which need to be spread across country for political and economic reasons. China will endure the population is dispersed to the required areas by ensuring industry is developed along the rail line and they have political will to do that
Government shouldn't be in the business of trying to make profits! Only providing essential services for their citizens
Profit can be used to subsidize other areas of a budget where there is a financial need, or reinvest to improve service.
You are right profit drives greed and bribes. But humans don’t work that way unfortunately
The more China debt crisis unravels the more I realize the US debt isn't so bad
The usa doesn't faces the severity of debt crisis because of the status of us dollar in the world
@@harshitmalhotra8627 Yes, you're right. The status of US dollar as the Most stable and strongest currency in the world is still in the record.
US dollar is still used as a reserve currency for global trade and finance.
Notice how the US has inflated the usd like mad Men since 2019? Lots of distractions but also remember trump was against China and he held office for 4 years;)
Unfunded liabilities say hi.
Usa is not a good long term prospect for debt management
You should be ashamed of yourself for recommending art as an investment. It's a none productive asset akin to the tulip craze in Holland in the 1600s.
noice video
Look, except for the Belt and Road initiative, all the money were spent within China, benefitting China, not fighting useless wars overseas or having 800 overseas bases like USA.
"Detroit to Wyoming" Ironically in the United States, you are aware aren't you that it was the railroads that hyped and built lines to national parks such as Yellowstone?
Except it was private companies making speculative investments, not govt pouring hundreds of billions on unprofitable projects for the sake of short term GDP growth.
@@heinaye3594 That's still better than spending Trillion dollar of money in war that achieve nothing.
@@Fauzanarief-n7i the problem is there are hidden costs for China such as expensive maintenance costs and their bloated railroad agency in addition to billions of $ in interest payments that have come due. It's a money pit for the CCP.
you are missing the point... this video is misleading...
I want to invest in Art. Where can I buy a Hunter Biden painting?
The fast train service in China is a very popular service. Traffic increases in double digits every year. Spin off economic benefits run into hundreds of billions.
Right, average little investors should hedge your risk by investing in art. 🤣😂😆At least art pays for my viewing of this content. 👍
I love your contents, BTW.
easy. wrap up the debt as a security and then flog it to unsuspecting investors abroad.
That's not a bubble - that's investing in infrastructure. Like the US did - many years ago.
It's a bubble when you build too vanity projects like high speed rails, even in places where it doesn't make sense to do so. High speed rails cannot accomodate freight trains and their utility dries up when there aren't enough passengers. The shortage of freight space has gone bad to a point where the prices for freight trains have surpassed truck transport prices per km travelled, which doesn't make sense because trains are supposed to be much much cheaper than trucks for long distance hauls
@@xiuxiu1108 No. A vanity project is when you blow up 2 trillion dollars killing thousands of innocent people in Afghanistan. When you use that money to build something beneficial for economy and something people really need like HSR then it is called "good governance"
WSM, your wrong. This is a long game great investment, nation building, low carbon transportation. Plus they can leverage export the HSR industry to the world which desperately needs the low carbon transportation. And 50% debt to GDP ratio is less than half that of USA with a growing versus stagnant economy, and well positioned for future.
This railway debt is not real issue for China, as they can "sweep them under rug", like USA print money to address it. It supports local economies, employment rates - is that not what most governments especially in rich west does? Seriously... subsidize public transport. Most importantly, money is not borrowed - no foreign debt, just left hand to right hand.
And now they realize and start to clamp down... next would be cost cutting initiatives, like how any major corporate would do. It's an issue but just normal finetuning, at national scale of China. They will likely look into other public transport operating models in the region to maintain the infrastructure... like Hong Kong, Taiwan or Singapore's rail systems... just at super scale.
Is that because Murica has not any single high speed rail networks? 😂😜😂
Compare to how much is in China Treasury.
Art has been used for centuries as a non-currency vehicle to exchange wealth and can stay somewhat stable during depression conditions?
Are highways profitable in the US
But we never wasted 2.2trillion of our money in just Afghanistan. right mate?
Gordan Chang journal
fuck that ad went forever
Train management is so corrupt the world over. Not only mismanagement but misappropriation of funds.
Ah a voice I want to hear
He keeps saying 'Bankski', it's pronounced like 'Bank-sea' (Banksy).
hey ,,, so for reals, how trust worthy is that master works thing ??? i ask because there was bs thing a couple of years ago where you invest in "supposively owning" gold as a group but it was a scam T . T .... trustworthy or not ?
Go and check their gov documents such as registration, licenses, tax declarations, etc
Don't let the advertisement fool you. Luxury goods always tank in a recession/depression, and fine art is a luxury good. Would you buy shares of an expensive mega-yacht when you're afraid that the stock market will decline?
How would you know it was genuine? You would never get to see the artwork.
Yes, it is a huge waste. However, it pales comparing to US war spending. At least, the HSR is there for people to enjoy but the war left people dead. Lessons to be learned.
It's so sad they are so isolationist because that much expertise could be contracted out in a lot of other countries.
Cool now do another one on public massive spending like the United States military
So will this cause the markets to drop again then? Are these mammoth HSR companies heavenly invested US stocks?
An add 2 minutes long.... thank goodness for fast forward feature on youtube.
Holy fuck more than 10% of the video is sponsor ad
The analysis today was incorrect. China considers infrastructure a part of national security to homogenize wealth distribution and cultural identity. Xinjiang has history of separatism and terrorism and infrastructure projects are the "carrot" to the re-education camps that are "stick." You wouldn't ask if the Dept of Transportation, Iraq war or if the Defense Dept is financially viable. Moreover, these are longterm goals with projected benefits in the 25 year range.
That's a bunch of regurgitated rhetoric that means nothing and contradicts basic math.
The HSR losses are so severe that railroads raise the prices on freight shipping to the point that it is cheaper to truck across China than to ship it by rail. Raising ticket prices won't help as the target demographic can only pay so much and will simply take a bus if ticket prices are too high.
In order for HSR to be profitable, every mile must be surrounded by a dense population within walking distance that can easily afford the ticket. That's why the oldest and most profitable HSR is in Japan.
And yes, there were geopolitical strategies involved. But as with the exotic ideas of all politicians it is unclear if the sunk costs did anything at all to prevent the resurgence of warlords. Just as it is unclear if there were ever any significant amount of Islamists in Xingjiang.
E
If the damn thing is anything like the bridges or buildings, it will be lucky to be there in 25 years...
@@samsonsoturian6013 still, even the premise that "China has 300% debt-to-GDP ratio, making it one of the most indebted major economies" is totally wrong, because that's the total non-financial debt-to-GDP ratio, which comprises of government, household and non-financial corporate debt. The equivalent number for other large economies at the end of 2020 are 360% for US, 335% for Canada, 305% for UK, 245% for Germany, 410% for France, 505% for Japan. There is no simple Google search to find these numbers, so I had to add the public and private debt from each country, but the individual numbers are all easily verified.
@@Kriophoros you're making this up as you go along.
@@samsonsoturian6013 he does, he has been commenting the same statistics in other threads as well. Guess he is a wumao.
Woah!!! Did I just see a China Train Line in Taiwan on the map?
Shares of artwork = SCAM SCAM SCAM
Uggggh the ads... Why?!?
10 min vid, 3.30 MW add, nice...
I told her about how Arizona Teachers Academy pays for a free degree in Art Education.
In the Netherlands we say, the costs comes befor the profits.
If you forget that, your company will be very temporarily`.
Sponser ad is too long. Thumbs down.
1/3 rd shinese economy fallen vertically.
600million endias living in poverty, endia supperpooper😎