THE GREAT BIG CHINA THREAD

[interestrateripoff]

Is This China's QE?

Shortly after we exposed the real liquidity crisis facing Chinese banks recently (when no repo occurred and money market rates surged), China (very quietly) announced CNY 1 trillion of 'Pledged Supplementary Lending' (PSL) by the PBOC to China Development Bank. This first use of the facility "smacks of quantitative easing" according to StanChart's Stephen Green, noting it is "deliberate and significant expansion of the PBOC's balance sheet via creating bank reserves/cash" and likens the exercise to the UK's Funding For Lending scheme. BofA is less convinced of the PBOC's quantitative loosening, suggesting it is more like a targeted line of credit (focused on lowering the costs of funding) and arguing with a record "asset" creation by Chinese banks in Q1 does China really need standalone QE?

[TheCountOfNowhere]

Is This China's QE?

Shortly after we exposed the real liquidity crisis facing Chinese banks recently (when no repo occurred and money market rates surged), China (very quietly) announced CNY 1 trillion of 'Pledged Supplementary Lending' (PSL) by the PBOC to China Development Bank. This first use of the facility "smacks of quantitative easing" according to StanChart's Stephen Green, noting it is "deliberate and significant expansion of the PBOC's balance sheet via creating bank reserves/cash" and likens the exercise to the UK's Funding For Lending scheme. BofA is less convinced of the PBOC's quantitative loosening, suggesting it is more like a targeted line of credit (focused on lowering the costs of funding) and arguing with a record "asset" creation by Chinese banks in Q1 does China really need standalone QE?

Blimey.....that 1 Trillion will buy a lot of flats in London

The whole world has gone mad !!!

[interestrateripoff]

Chinese 'Fake' Trade Data Remains "A Bit Of A Mystery" Despite Clean-Up Efforts

Over a year ago we first brought China's 'fake' trade data and abundant discrepancies to the public's attention and in December China's State Administration of Foreign Exchange (SAFE) began clamping down on trade-financing on fabricated deals after the first crackdown failed to eliminate the deception. Now over a year later, as Bloomberg reports, China's data still does not add up. "It's still a bit of a mystery," said StanChart's Stephen Green, the data "suggest that some of that is still going on."

At least it's not banking data..

[interestrateripoff]

Shipping Rates Suffer as China Hydro Power Cuts Coal Need

Record production of hydropower from China’s Three Gorges and newer dams is displacing so much coal that rates to transport it have plunged to about record lows, roiling the shipping market.

[interestrateripoff]

PBOC’s $162 Billion Loan Spurs Speculation on Easing

A Chinese central bank loan that’s almost the size of the U.S. bailout of American International Group Inc. has spurred speculation that policy makers have adopted a new form of monetary easing to shore up growth.

[interestrateripoff]

• China Central Bank Signals No Broad Monetary Easing

• China Services Index Drops to Six-Month Low on Property

[interestrateripoff]

http://www.zerohedge.com/news/2014-08-03/despite-surging-pmis-chinas-poor-resort-self-immolation

With China's Manufacturing PMI at cycle highs and Services PMI comfortably in expansion, everything must be ponies and unicorns among the world's most mal-invested credit-bubble-fueled populace. However, as we have pointed out, discrepancies abound in the data and now desperately sad anecdotal picture of a wretched working class in China are starting to emerge. As WantChinaTimes reports, 55-year-old Zhao Guangsheng poured flammable liquids on his body before lighting himself on fire and running into Xingtan city government's office lobby (in Hunan province). Poverty appears to be the reason for his self-immolation, aside from mental instability, as Zhao was unable to pay utility bills after being moved due to forced land acquisitions by the government.

As WantChinaTimes reports,

The city government of Xingtan in south China's Hunan province has confirmed rumors that a man set himself on fire outside government offices on Friday after photos of the self-immolation incident went viral on the internet.

Witnesses say the man, identified as Zhao Guangsheng, a 55-year-old former local boiler plant worker, poured flammable liquids on his body before lighting himself on fire and running into the city government's office lobby at around 4:30pm on Aug. 1.

The flames were eventually put out by security guards and Zhao was rushed to the hospital, where he reportedly sustained third-degree burns to 99% of his body.

...

[TheCountOfNowhere]

http://www.zerohedge.com/news/2014-08-03/despite-surging-pmis-chinas-poor-resort-self-immolation

Shocking.

[interestrateripoff]

http://www.businessweek.com/articles/2014-08-01/with-end-of-chinas-one-child-policy-there-hasnt-been-a-baby-boom#r=rss

Last November, China announced the loosening of its restrictive one-child population policy: Couples would soon be permitted to have two children so long as one parent was an only child. Government planners predicted that roughly half of China’s 11 million eligible couples would chose to have a second child within five years, and investors predicted a boom in sales of diapers, baby formula, and educational toys in China.

The policy change has been rolled out in 29 of China’s 33 provinces and regions, yet by the end of May only 271,000 applications for permission to have a second child had been submitted. Many came from older mothers concerned not to lose their chance. At an agency in Beijing’s Tuanjiehu neighborhood that connects parents with maternity nannies, staff said that the majority of requests pertaining to second children came from women in their late 30s.

Six months into the new policy is still too early to judge the ultimate impact. But experts now express more modest expectations. “Every metric thus far indicates the loosening isn’t leading to a baby boom,” says Mei Fong, author of a forthcoming book on China’s population policies. With rising costs of urban living, Chinese couples are deliberately limiting family size for reasons similar to those depressing fertility in Taiwan, Japan, Korea, Singapore, and Western countries.

It seems that China has already caught the Western disease and people now have to think about costs.

Edited August 4, 2014 by interestrateripoff

[HovelinHove]

When this finally goes this will have a massive impact on some Pacific property markets like Sydney and Vancouver. The Chinese have been splurging on property in those cities, often buying cash, but where does that cash come from? My money is on the fact that much of it is actually in the form of Chinese shadow banking loans made against increasingly vulnerable Chinese assets, particularly property. When this goes Sydney, Vancouver etc will have a nasty shock...buyers will disappear and there will be a fire sale as many Chinese who gambled too much will try to cover their losses.

[onlyme2]

http://www.businessweek.com/articles/2014-08-01/with-end-of-chinas-one-child-policy-there-hasnt-been-a-baby-boom#r=rss

It seems that China has already caught the Western disease and people now have to think about costs.

They should take a leaf out of Brown's and Cameron's books - import loads more cheap labour over and above the provision of land/buildings, promote excess debt and lanlordism and really pile on the shit for youngsters.

[dryrot]

http://www.businessweek.com/articles/2014-08-01/with-end-of-chinas-one-child-policy-there-hasnt-been-a-baby-boom#r=rss

It seems that China has already caught the Western disease and people now have to think about costs.

Hi

They still have a major gender imbalance.... "As a result of the unbalanced sex ratio for the last 30 years, by 2020 China will be home to roughly 30 million more young men than women. That means a large number of men won’t be able to find wives—which has already increased the illegal trafficking of women from poorer neighboring countries, including Cambodia, Myanmar, and Vietnam. Bachelors are also more prone to violence than their wedded peers."

As Mark Steyn stated, unless China is planning to be the first gay superpower since Sparta, this is unlikely to end well.

[interestrateripoff]

China Services Index Falls to Record Low

China’s service industries stagnated in July as a private index fell to a record low, suggesting the government’s stimulus measures are failing to gain traction outside of manufacturing.

[interestrateripoff]

China's "Prelude To A Storm" As Record Private Bonds Mature

With Shanghai having limited retail exposure to high-yield bonds, and the Chinese corporate bond market has overtaken the United States as the world's biggest and is set to soak up a third of global company debt needs over the next five years, it is no wonder that, as Bloomberg reports, analysts fear "a prelude to a storm." Privately issued notes totaling 6.2 billion yuan ($1 billion) come due next quarter, the most since authorities first allowed such offerings from small- to medium-sized borrowers in 2012. This week a 4th issuer has faced a "payment crisis" and while officials are trying to expand financing for small companies (which account for 70% of China's economy, with debt-to-equity ratios exceeding 200%, this is nothing but more ponzi. As Goldman warns, it appears China's Minsky Moment is drawing near (as the hangover from Q1's credit impulse kicks in).

Roll over Mr Bond.

[interestrateripoff]

Step Aside Panama Canal: China To Build Nicaragua Canal, "World's Largest Infrastructure Project Ever"

0

A month ago, a Nicaraguan committee approved Chinese billionaire Wang Jing's project to create The Nicaraguan Canal. With a planned capacity to accommodate ships with loaded displacement of 400,000 tons (notably bigger than The Panama Canal), the proposed 278-kilometer-long canal that will run across the Nicaragua isthmus would probably change the landscape of the world's maritime trade. "The project is the largest infrastructure project ever in the history of man in terms of engineering difficulty, investment scale, workload and its global impact," Wang told reporters.

WTF we must be in one hell of a bubble now, is there enough ships that would want to travel this canal?

[Democorruptcy]

Step Aside Panama Canal: China To Build Nicaragua Canal, "World's Largest Infrastructure Project Ever"

0

A month ago, a Nicaraguan committee approved Chinese billionaire Wang Jing's project to create The Nicaraguan Canal. With a planned capacity to accommodate ships with loaded displacement of 400,000 tons (notably bigger than The Panama Canal), the proposed 278-kilometer-long canal that will run across the Nicaragua isthmus would probably change the landscape of the world's maritime trade. "The project is the largest infrastructure project ever in the history of man in terms of engineering difficulty, investment scale, workload and its global impact," Wang told reporters.

WTF we must be in one hell of a bubble now, is there enough ships that would want to travel this canal?

I'm going all Daily Mash....

Please be careful in your boats

China is going to cut through Nicaragua to create a Nicaraguan channel. What they haven't realised is that when they cut through Nicaragua, the bottom bit of Nicaragua, Costa Rica and Panama will float away. The new Nicaraguan Channel will look large enough for your boat but please bear in mind that the newly cut away land mass could be floating anywhere. So while at sea please keep an eye out for it, to avoid your boat being bumped.

[steve99]

When this finally goes this will have a massive impact on some Pacific property markets like Sydney and Vancouver. The Chinese have been splurging on property in those cities, often buying cash, but where does that cash come from? My money is on the fact that much of it is actually in the form of Chinese shadow banking loans made against increasingly vulnerable Chinese assets, particularly property. When this goes Sydney, Vancouver etc will have a nasty shock...buyers will disappear and there will be a fire sale as many Chinese who gambled too much will try to cover their losses.

I hope so, its crippling real people in Melb and Sydney right now. Cash buyers buying up everything within a large and ever expanding Chinese defined (ie Chinese neigbours) residential belt of real estate, many agents only advertising in Chinese. Massive block of flats in the City areas also pre sold in China/Hongkong etc, many remaining empty when sold on account of being bought for the sole reason of being a store of offshore wealth and I suspect never really adding to the stock of housing. A massive extraction of this (ill gotten) wealth would be a panic worth buying a ticket to watch, especialy when it spreads to every other suburb full of 'pigs at the trough' speculators.

[Executive Sadman]

Hi

They still have a major gender imbalance.... "As a result of the unbalanced sex ratio for the last 30 years, by 2020 China will be home to roughly 30 million more young men than women. That means a large number of men won’t be able to find wives—which has already increased the illegal trafficking of women from poorer neighboring countries, including Cambodia, Myanmar, and Vietnam. Bachelors are also more prone to violence than their wedded peers."

As Mark Steyn stated, unless China is planning to be the first gay superpower since Sparta, this is unlikely to end well.

What of all the men in these south east asian countries? No end of wrinkly old farts around here with their thai 'mail order brides'

[jasonpistol]

http://www.bloomberg.com/news/2014-08-11/property-defaults-seen-as-financing-stresses-mount-china-credit.html

[billybong]

There seems to be something not quite financially correct when there's a proposal to build a canal in a place that from the map seems about 6 times as long as necessary (compared to the Panama Canal) and sort of just along the road from the Panama Canal which could be modified.

For sure the Panama Canal was built where it was built because it was the narrowest and cheapest point to build a canal.

It's most likely politics etc as well as money to burn.

Edited August 11, 2014 by billybong

[billybong]

From the zerohedge link:

"If you can deliver, you will find all the world's money at your disposal," Wang said,

because we've got it all - he laughed.

[zugzwang]

The Chinese are still spending like George Osborne, and for the same reason.

http://soberlook.com/2014/08/loose-policies-from-beijing-help-pump.html

Scotiabank: – One reason why the feared wave of summertime defaults out of China’s shadow banking system has yet to emerge is that China’s credit cycle is not slowing down and so credits are generally being successfully rolled over. That’s a short-term plus but hardly counters concerns that China’s credit cycle remains far too loose.

Edited August 11, 2014 by zugzwang

[Eddie_George]

The Chinese are still spending like George Osborne, and for the same reason.

http://soberlook.com/2014/08/loose-policies-from-beijing-help-pump.html

One day the music will stop.

[interestrateripoff]

The Wonders Of The Modern World: China's Amazing Tower Of Garbage

When it comes to ancient wonders of the world, there is the tower of Babel, and to a lesser extent, the leaning tower of Pisa. Sadly, modern wonders leave something to be desired: case in point, this 30 metres high garbage mountain at the crossroad of Huanghe avenue and Zhufeng street of Shijiazhuang, central China's Hebei province. The garbage mountain has been piled up as high as a 9-story Building in the last 30 years. The local village committee now is dealing with these wastes: best of luck. And to think all it took were several trillion in non-performing loans...

[FreeTrader]

China Home Prices Slip Again in July

SHANGHAI—The average price of new homes in China fell for a third straight month in July, declining nearly twice as fast as in June, as property developers further cut prices in response to a market downturn.

Housing sales in China have fallen this year, dropping 10.5% by total value in the first seven months compared with the same period a year earlier. Analysts expect further price cuts as local governments and property developers grapple with a glut of apartments and tight credit conditions.

"I'm definitely not buying homes anymore," said Gan Xiaodong, 36 years old, who previously flipped several homes in the southwestern Chinese city of Chongqing. Mr. Gan said he was having trouble selling a particularly large house there, and "beginning in 2011, I couldn't raise the price anymore."

[...]

[...]

To lure buyers back into the market, local authorities in around 30 cities in recent months have loosened property restrictions so home buyers can buy second or subsequent homes. Others are intervening in the credit market, asking banks to lower requirements for down payments on second homes and offering subsidies to banks that offer favorable mortgage rates. But these moves have had a limited impact on the housing market so far.

Wall Street Journal