Chinese Economics Thread

[AndrewS]

The "Nightmare Scenario" For Beijing: 50 Million Chinese Apartments Are Empty

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If you look at the figures, it's a serious issue, but one that still looks manageable.

The desired occupancy rate would be comparable to 14%, which we see in Taiwan or Japan, both places which have already urbanised.
So that translates to China having only 19 Million excess empty apartments rather than 50 Million.
Those 19 Million apartment would house roughly 60 Million people.

Given that China is still in the process of urbanisation, those 60 Million people can still be found in rural areas yet to urbanise.

The bigger issue is how prices are simply too high, because the purpose of housing is to be affordable living space, not an investment vehicle that keeps going up and up.

From that perspective, a property ownership tax really needs to be implemented.
That will force property owners to find paying occupants for their empty properties.
And it also provide local governments with a stable revenue stream for local services.

It should also help moderate housing construction so that the excess supply is gradually mopped up.

 

[Anlsvrthng]

If you look at the figures, it's a serious issue, but one that still looks manageable.

The desired occupancy rate would be comparable to 14%, which we see in Taiwan or Japan, both places which have already urbanised.
So that translates to China having only 19 Million excess empty apartments rather than 50 Million.
Those 19 Million apartment would house roughly 60 Million people.

Given that China is still in the process of urbanisation, those 60 Million people can still be found in rural areas yet to urbanise.

The bigger issue is how prices are simply too high, because the purpose of housing is to be affordable living space, not an investment vehicle that keeps going up and up.

From that perspective, a property ownership tax really needs to be implemented.
That will force property owners to find paying occupants for their empty properties.
And it also provide local governments with a stable revenue stream for local services.

It should also help moderate housing construction so that the excess supply is gradually mopped up.

Yes, there is the problem , how to move the disposable income and wealth from the guys who invest it to useless assets to the ones who consume ( use) it.


It can be by the collapse of house prices, or by re-balancing the incomes.

The latest one is the hardest one. And longest.

 

[AssassinsMace]

Where I live in the San Francisco Bay Area, the homeless have taken over freeways. When you drive along freeways, the homeless are camped out along the freeways everywhere. It's truly a blight. The freeways are under the jurisdiction of the state of California so local authorities have no say. Personally I have no sympathy for the homeless. When they started getting the national attention in the US, I was a kid then and I would hear of incidents where the homeless would attack Asians because Asians had homes while they didn't. One time I had a homeless guy call me over. I did not come over ignoring him so he had to catch up to me and he started telling me how Asians don't give money to the homeless. I turned to him and said, "Then why are you following me? If Asians don't give homeless money, what the F are you talking to me for?" He immediately turned and walked away. If that's what they believe, why do I see homeless hanging around Chinatown panhandling? Yeah in San Francisco they could be going after tourist money but across the bay in Oakland's Chinatown it's not a tourist destination. Chinatown stores have groceries outside and I see the homeless just take and walk away without paying like it was their right.

Anybody remember the New York Times story where they found a homeless person in China and it was to them a declaration China was a failure as an economy and was suppose to embrace the Western economic system of doing things?

 

[AndrewS]

Yes, there is the problem , how to move the disposable income and wealth from the guys who invest it to useless assets to the ones who consume ( use) it.


It can be by the collapse of house prices, or by re-balancing the incomes.

The latest one is the hardest one. And longest.

We don't need to see a collapse in house prices. Just stable prices or a moderate correction.

Increasing incomes is difficult, but what is the point of economic growth unless incomes are increased?

If there is sustained wage growth of 7%, incomes will still double in the next 10 years.

---

Also, does anyone know if there are any proposals on property sales taxes?
Eg. In the UK, the purchase of a second property results in an extra 3% tax on the purchase price.

 

[Jura The idiot]

now noticed the tweet

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China is the most optimistic country in the world, with 91.4% of its citizens believing their country will become a better place in the next decade, according to a report released by the Economist Intelligence Unit on Monday.

 

[Jura The idiot]

now I read
China to become largest theme park market by 2020
2018-11-13 16:58 GMT+8

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China is expected to become the world's largest theme park market by 2020 as the overall number of visitors to the theme parks will surpass that of the United States, according to a report released by AECOM, an American multinational engineering firm.

The report shows that the number of travelers to China's theme parks reached 190 million in 2017, which increased 20 percent from 2016. It also reveals that China currently owns 128 city-level theme parks and at least 70 new parks will be under construction or in a detailed planning stage by 2055.

Most theme parks are located in economically-developed areas like Southern and Eastern China. The East China Area accounts for 34 percent of the total theme parks, which is based mainly on its large size of population and economic aggregate.

In addition, the AECOM team also found that many Chinese central areas, which have a large population and a strong GDP, have already started to plan for theme park projects.

China's theme park market offers great potential for growth and will expect more investment by Chinese theme park owners and operators.

 

[Jura The idiot]

from Africa, but thought I might share anyway

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The Chinese-built Maputo Bridge with its link roads in Mozambique--the largest suspension bridge in Africa--officially opened to traffic on Nov. 10. The 3-km-long bridge links the north and south of Maputo Bay, which until recently could only be crossed by boat.

 

[Anlsvrthng]

We don't need to see a collapse in house prices. Just stable prices or a moderate correction.

Increasing incomes is difficult, but what is the point of economic growth unless incomes are increased?

If there is sustained wage growth of 7%, incomes will still double in the next 10 years.

---

Also, does anyone know if there are any proposals on property sales taxes?
Eg. In the UK, the purchase of a second property results in an extra 3% tax on the purchase price.

This makes the things interesting.

Either the house prices drop to half, and the empty apartments will be filled, or the salaries will increase double-fold , and the apartments will be full in ten years time.

The price drop using up the empty apartments fast, and keep the construction industry busy, the second one lead to a Japanese style deflation, with death construction industry, and freeze house market for one ( few )decade)

So, either the housing price collapse, OR the construction industry ( with all employment) ,

 

[Jura The idiot]

sorry:

***
219
Very Unhealthy
Updated on Thursday 4:00
Beijing Air Pollution: Real-time Air Quality Index (AQI)

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***

I took a look after I had noticed the tweet

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Air quality index in

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reached level-six air pollution, the most severe type on Wednesday afternoon, with 13 expressways shut down due to the heavy fog, according to local authorities

 

[manqiangrexue]

This makes the things interesting.

Either the house prices drop to half, and the empty apartments will be filled, or the salaries will increase double-fold , and the apartments will be full in ten years time.

The price drop using up the empty apartments fast, and keep the construction industry busy, the second one lead to a Japanese style deflation, with death construction industry, and freeze house market for one ( few )decade)

So, either the housing price collapse, OR the construction industry ( with all employment) ,

Or, they can do it Chinese style, which is to lift more poor people out of poverty, expand the middle and upper class, turn empty lots into ghost towns then use those new middle class people to turn ghost towns into metropolises and keep growing. Hell, I think Beijing and Shanghai are too crowded. Time for some new cities to take on some population, both by diverting from migration into the established cities and by serving as a destination for people tired of living in the Beijing traffic.