stompix stompix stompix
Yeah Franky, do you have something intelligible to say?
I saw this thread yesterday and, again, it seems that this section gives more play to doom and gloom news, especially if it is about USA and EU. I had to rescue the thread from almost the second page.
The usual, US debt grows everyone screams, disaster, famine, bankruptcies, run to the hills..
China debts grows, this is actually good!
When the 2008 crisis broke out, which started in the real estate sector, although it affected the rest of the sectors, China was not greatly affected, as it continued to grow at close to double-digit rates during those years. They have not yet seen a crisis in the sector and it will come sooner or later. In the UK and Spain it was very noticeable. First the real estate sector collapses and then the rest of the sectors are affected. Let's see how this one goes.
China real-estate sector is heavy controlled, basically if the city/region/province doesn't want for prices to go down it can issue limits on price per sqm, so you won't be allowed to sell below that, that's why some investors sell you the house with a gift such as a car for 200 000 instead of asking for a house at 150 000!
In theory this would control the prices as it prevent people from selling , they can go further and not allow you to sell at all, it's controlled market so again in theory easier to prop, till the serious cracks appear and then there is no way out of it, goes down like a house of cards worse than if it had fallen the first time!
It's a fact that China's domestic demand alone can't support the whole manufacturing sector.
We're getting closer to the point of finding out this, I'm living in Europe so the experience might be different from the US but lately a ton of cheap stuff in the chain stores no longer comes from China, it's mostly South East Asia, the trend is pretty obvious with clothes, I don't think I've ever seen so few chinese products, just India, Bangladesh, Indonesia even Egypt and weirder than everything Mexico! Same for all that cheap plastics stuff, till last year I don't think I've ever seen something made in Philippines in a store for all my life!
