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Why The Wheels Will Fall Off Chinas Boom.

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8. China excels at building new things rapidly, but fails at maintenance. For the past 30 years, the mindset has been: tear it down and build a replacement. Buildings that are barely 20 years old are routinely torn down in China and replaced with much grander structures.

Much the same idea as their manufacturing industry as a whole then.

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Tbh all of those criticisms could be put at many countries around the world including the UK.

Except this is woefully wrong

Many know-nothing Western pundits repeat the tropism that China's rural population will soon fill up all those empty towers and cities. What they don't understand is that perhaps 10% of China's population can afford to buy a home, even in third-tier cities nobody in the West has even heard of. Most workers in China make $200 a month or less. Buying a condo for $100,000 is out of the question.

In China the poor often have access to very cheap accomodation, so you work in a factory? Even ruthless company Foxconn built a city an entire CITY to house its staff.

Or you can live in a box home, for $30 a week. Or you can live in a container home for $1 a day. Or even lower dorm homes which are $30 apartments cut into 5-6 separate cage like homes.

While in the UK NMW on a 40hour week is £204 after tax. And a nasty nasty bed sit is £75-90 a week. Take off council tax and that person has barely half left.

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When it's easier to make money speculating your economy is doomed.

It will always be easier to make money speculating on assets when their price is artificially suppressed by the imposition of artificial interest rates on artificial money.

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Tbh all of those criticisms could be put at many countries around the world including the UK.

Except this is woefully wrong

In China the poor often have access to very cheap accomodation, so you work in a factory? Even ruthless company Foxconn built a city an entire CITY to house its staff.

Or you can live in a box home, for $30 a week. Or you can live in a container home for $1 a day. Or even lower dorm homes which are $30 apartments cut into 5-6 separate cage like homes.

While in the UK NMW on a 40hour week is £204 after tax. And a nasty nasty bed sit is £75-90 a week. Take off council tax and that person has barely half left.

Since when is living in scrappy factory employer homes the same as buying $100,000 apartments?

I don't see how living in $1 a day container homes is going to help the housing bubble either.These people can't afford the new builds so i don't see whats so wrong about the part you quoted.

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Since when is living in scrappy factory employer homes the same as buying $100,000 apartments?

I don't see how living in $1 a day container homes is going to help the housing bubble either.These people can't afford the new builds so i don't see whats so wrong about the part you quoted.

The housing bubble in Europe and the USA encompasses the entire population pretty much. From the wealthy to the NINJAs. This is why HPC membership is around 100,000 people rather than 64 million.

In China the investing middle class is only about 250-300 million this means that 1.1bn people are poor. Thus a HPC in China wipes out about 1/5 of their population. No biggie, they can do the typical blaspemous capitalist thing i.e. clear out the dead wood and malinvestments while the non wiped out 1.1bn can move into the void.

The poor people in China don't care about HPI/HPC as they can get cheap accomodation anyway. Unlike in the UK where renting is expensive and so is buying. In the UK if you rent you inflate the HPI bubble by funding BTLers. If you buy you are directly funding the HPI bubble.

While those poor people in China aren't funding the bubble either way. They have options i.e live in company accomodation or cheap rentals which do not exist in the UK.

The poor people in China are also migrant workers who play wage arbritage. I.e. they work in factories for a few years then take their money back to their home villages and build their homes OUTRIGHT. No mortgage no debt. Something which NMW employees have no chance of either in the UK.

Thus HPI/HPC doesn't really affect them. So what if 1.1bn can't buy those mega flats. A lot of people don't want them anyway. The 1.1bn poor people want to build their own homes. It is a massive cultural thing to build your own home. Buying comes a distant second.

EDIT

I would also note China is a non voting country. Therefore the CCP doesn't have to play populist games like our governments do i.e. to keep the HPI bubble going to stay in power.

Edited by ken_ichikawa

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Maybe this is just an 'urban myth' type thing- but is it true that in China people do not like buy 'second hand' properties? And the reason these places stand empty is partly because if they were rented out they would instantly lose a lot of value?

Edited by wonderpup

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Maybe this is just an 'urban myth' type thing- but is it true that in China people do not like buy 'second hand' properties? And the reason these places stand empty is partly because if they were rented out they would instantly lose a lot of value?

I have heard about this

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Did a double take to check that was really Zero Hedge, to find it was a guest post. :D

Now they can go back to their mandated obsession with the FED and gold. :rolleyes:

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Maybe this is just an 'urban myth' type thing- but is it true that in China people do not like buy 'second hand' properties? And the reason these places stand empty is partly because if they were rented out they would instantly lose a lot of value?

Sort of...

A few years ago it was considered 'bad' to marry a non virgin (both sides) the crude expression is would you wear another man's shoes?

THe bigger issue is the same as in the UK, the wealthy want to get out of cash.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=165211

Secondly there is a massive irony. the only people who can afford to rent such BTL places, are those who buy them in the first place! The working poor would never live there anyway as they have alternatives and build their own. The rich have their own and the middle buy instead of renting anywya! :lol:

Edited by ken_ichikawa

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  • 314 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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