Trade War with China

[Anlsvrthng]

As for houses, China's government has always implemented policies to stop the purchasing of property as a way for the rich elite to become richer and the common man to be squeezed out. Every person has a property limit that he cannot exceed and transfers to family are heavily scrutinized. Beijing wants Chinese real estate to be purchased as living quarters so more people can prosper in cities.

The limits are very wise, it preventing the rich to loose money on properties, and only the middle class duped into the housing casino.

The rich is doing what he can best: buying plots, making flats that can be sold to the losers on inflated prices.
Oh, and provide mortgages.

 

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The limits are very wise, it preventing the rich to loose money on properties, and only the middle class duped into the housing casino.

The rich is doing what he can best: buying plots, making flats that can be sold to the losers on inflated prices.
Oh, and provide mortgages.

Therefore as a result China doesn't have the housing bubble burst and debacle like the US did back in 2008 that requires the bail out from the tax payers in TRILLIONS of DOLLARS. It takes a strong leadership and good government to prevent this from happening. The CPC is watching closely on every facet of the Chinese economy and banking.

 

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So , you saying that the Chinese making phones/ toys and many other consumer goods in the count of million man-years , and entitled to buy USA destroyers in the cost range of thousand man-years ?

Or you mean the Chinese government wants to buy Chinese destroyer from the money of the USA government ?

HOW ?

So how do you answer his question without reading the entire content of his previous comments? Or do you mean the USA government bonds borrows money from China for free and NOT pay any kind of interests? That don't make sense. Tam was using the interests money that China earns from the purchasing for treasury bonds and other forms of borrowing is enough to purchase a few naval ships as an example. I don't know why you did not get that.

 

[Ultra]

8 out of 72? That's really very very good. Do you know how many countries out there are completely irresponsible with money? You can't deal with them without them getting into debt "traps" and it's never anyone's fault except their own. If they see money, it's gone and it's not to an investment. China's OBOR is as mutually-beneficial as it gets. China offers generous loans that these countries eagerly accept in order to improve their own infrastructure. They saw the terms, they agreed to them, they promised that these financial commitments would not overwhelm them, and China let them have what they asked for. If this isn't mutually beneficial then I guess your definition would have to be China holding their hands and micromanaging their accounts to make sure that every step went well, in which case they'll call China condescending. And if that doesn't work, then China should just give them endless cash without the need for repayment, right? That's mutually beneficial, right? Cus that would be the only place to go from what's already been given to them.

You're the only person I've heard call infrastructure investments short-sighted. These investments are the definition of long-term plan. You're the one who's short-sighted, abandoning long term projects and future benefit because of near-term financial difficulties. Blinder than a bat with strep throat, I'd say. And you're the one who needs to wake up, to the simple fact that everyone is responsible for their own finances. All loans were offered as an opportunity, and they accepted; nothing was forced on them. If they cannot live up to the terms that they willfully entered into then the only fault lies with them and they can lose trust in their own financial management. If they lose trust in China when China has fulfilled all parts of its side of the contract, then they can be swallowed by their own irrationality. Nothing can be done about that.

NO.


8 is serious debt trap and 23 are in danger of falling into it. That's 1 in 3 that China scammed into giving up their sovereignty.

You can argue they are irresponsible with their own finance or they are all illiterates who can't read their contract....
But the fact remains - now China is being perceived as PREDATORY. You only need to look at various leaders like Malaysia's PM, the greeks, even Pakistan now threatening to abandoning their contract. Now that's a lot of people in those nations now that think of China in very negative light. You can build as many Confucius Institutes as you want but it will not counter those negative perception. The net effect will be people stop trading with China.

As for your second paragraph, I think you misunderstood. I never call infrastructure investment short-sighted.
What I refer to as "short-sighted" is Chinese leadership's current predatory practice of structuring the loan so poor nations cannot service them without giving up their sovereignty. That's short sighted and create massive amount of negative perception and burning away all the good wills and along with it bridges (of friendship).

They should have structure the loans so these poor nation will be able to service them. Not falling into debt trap.

And even just 1 nation that falls into debt trap out of 72 is already too high. Let along 23.

 

[hkbc]

NO.


8 is serious debt trap and 23 are in danger of falling into it. That's 1 in 3 that China scammed into giving up their sovereignty.

You can argue they are irresponsible with their own finance or they are all illiterates who can't read their contract....
But the fact remains - now China is being perceived as PREDATORY. You only need to look at various leaders like Malaysia's PM, the greeks, even Pakistan now threatening to abandoning their contract. Now that's a lot of people in those nations now that think of China in very negative light. You can build as many Confucius Institutes as you want but it will not counter those negative perception. The net effect will be people stop trading with China.

As for your second paragraph, I think you misunderstood. I never call infrastructure investment short-sighted.
What I refer to as "short-sighted" is Chinese leadership's current predatory practice of structuring the loan so poor nations cannot service them without giving up their sovereignty. That's short sighted and create massive amount of negative perception and burning away all the good wills and along with it bridges (of friendship).

They should have structure the loans so these poor nation will be able to service them. Not falling into debt trap.

And even just 1 nation that falls into debt trap out of 72 is already too high. Let along 23.

Not sure what any of this has to do with the "trade war" Chinese loans are generally for infrastructure (railways power stations bridges etc) poor nations who don't want their infrastructure improved or upgraded don't need to take out a loan! This is whole debt trap BS is just another pile of propaganda and fear mongering!

As for Greeks abandoning their contract I don't think it was the Chinese who are bankrupting their economy! who are they in hoc to the IMF and the EU! Pakistan is in fiscal difficulties because the US suddenly withdrew their so called "aid". The Malaysians have cash flow issues because the kleptocracy that was the previous government swindled the national coffers with the 1MDB scam courtesy of Goldman Sachs.

Its a nice sound bite to bleat on about neo-colonism, chinese debt traps, loss of sovereignty but in the last 50 years, the IMF and the world bank has actually f**ked over many more countries with strings attached loans than anything the Chinese are doing

 

[Jura The idiot]

now I read
China refutes U.S. travel advice
Xinhua| 2019-01-04 20:48:41

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China's foreign ministry on Friday refuted a travel advisory issued by the United States, and said China always welcomes foreign citizens and protects their lawful rights.

The remarks came after the U.S. State Department updated a travel advisory warning, saying visitors to China are at risk that the Chinese government may take exit bans to prohibit them from leaving the country.

"China always welcomes foreign citizens, including U.S. citizens, to visit China, and protects their security and legal rights, including freedom of entry and exit," Foreign Ministry spokesperson Lu Kang told a press briefing.

"Of course, foreign citizens in China should also respect and abide by Chinese laws," Lu said.

Regarding a very slight number of foreigners suspected of violating laws and committing crimes in China, the Chinese authorities have always impartially handled cases in accordance with the law, and safeguarded their legal rights and interests, he added.

"Frankly speaking, the travel advisory issued by the United States does not hold water," Lu said.

From January to November 2018, 2.3 million people traveled from the United States to China, said the spokesperson, adding that this meant 70 out of every 10,000 Americans visited China.

"This outnumbers the proportion of Chinese people visiting the United States," Lu said. He said such figures could answer the question of whether China was safe for foreigners.

"We hope the U.S. side will make more efforts to promote exchanges and mutual trust between Chinese and U.S. people rather than the opposite," he said.

 

[Anlsvrthng]

Therefore as a result China doesn't have the housing bubble burst and debacle like the US did back in 2008 that requires the bail out from the tax payers in TRILLIONS of DOLLARS. It takes a strong leadership and good government to prevent this from happening. The CPC is watching closely on every facet of the Chinese economy and banking.

Agree, this is the most probable outcome by Michael Pettis.
It means China will avoid the crisis , but will fall into the middle income trap.

So how do you answer his question without reading the entire content of his previous comments? Or do you mean the USA government bonds borrows money from China for free and NOT pay any kind of interests? That don't make sense. Tam was using the interests money that China earns from the purchasing for treasury bonds and other forms of borrowing is enough to purchase a few naval ships as an example. I don't know why you did not get that.

Interesting, everyone simplify things that complex ( like Chinese treasury holding, GPS clock , trade relations) , and complicated things that are relatively simple ( income of households, policy choices of PBOC ).

What is the different between these two :
1. Government of China goes to PBOC, and get yuan loan to buy destroyer
2. Government of China goes to PBOC, deposit USA treasuries (or the interest on them), and get yuan loan to buy destroyer.

I have to mention that the PBOC is actually part of the government , so if the USA inflating away the treasury, or freeze the accounts like in the case of Iran sanctions the government still has the yuan loan that she has to pay back. ( or face inflation )

 

[tidalwave]

BAHAHAHA. Dump the US Treasury.
DUMP THE US TREASURY you say.

That would actually be great for the US. Once China dumps all of the US Treasury bonds and the bond market collapses, US Government would then buy back those treasury at discounted price, that means China ABSORBS THE LOSS while US GAINS WITHOUT PAYING FOR THE LOSS.

DUMB ASSES.

Lol, why being emotional??

Well, China treasury is at the low point. It's dumping at gradual case.

That's why interest rate being raised.
Trump does not like it a bit.

Yes, treasury being dumped....SLOWLY...lol

 

[gelgoog]

The Chinese government basically controls the banks in China. They have the ability to do things other governments cannot do. Plus the Chinese currency, the Renminbi, is not fully convertible. So the risk of capital flight is decreased as you typically are severely constrained from flowing capital out of China. Now, there are mechanisms that rich people in China use to get their money out of China, but they are severely hampered in doing it. There are also loan sharks and pyramid financing schemes in China outside the government control. Those can collapse and cause crises. A similar event happened in Romania in the 1990s for example.

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However I doubt the current situation is something the Chinese government cannot control. There are all sorts of measures the state can put in place to control the housing debt and shed the excess housing inventory. They can simply start collecting property tax in the major cities for families with more than one house for example. This would also provide extra funding to Chinese provinces so I think most of them would be up for it. Since the state also owns the electrical power companies and utilities it would be rather trivial to analyze and cross-reference if the house is occupied or not. If loan mortgages start to go under the Chinese government can simply depreciate the currency by inflation and make the mortgages easier to repay. i.e. basically a debt haircut. However I doubt it will come to that.

 

[Anlsvrthng]

They can simply start collecting property tax in the major cities for families with more than one house for example. This would also provide extra funding to Chinese provinces so I think most of them would be up for it. Since the state also owns the electrical power companies and utilities it would be rather trivial to analyze and cross-reference if the house is occupied or not. If loan mortgages start to go under the Chinese government can simply depreciate the currency by inflation and make the mortgages easier to repay. i.e. basically a debt haircut. However I doubt it will come to that.

That would cause immediate collapse of house prices, with a full stop of new housing construction , bank problems and the elimination of the best part of wealth of middle class.

They will try to control the situation, keep the status quo and stay in the middle income trap.
No one will introduce anything that create unpredictable outcome. There is not enough flexibility for that in the Chinese economy/political culture.