Tag Archives: China

Official: China Bubble ‘Undisputable’

4 Mar

From China Daily:

China’s real estate industry is in an “undisputable” bubble with its skyrocketing property price fermenting an imminent structural inflation that might hijack the country’s booming economy into violent fluctuations, a high-ranking official said on Wednesday’s Beijing News.

“The over-speedy price hike is evident of an undisputable bubble in the property market, which is a major propeller behind the current inflation,” said Yin Zhongqin, deputy chairman of the Financial and Economic Affairs Committee of the National People’s Congress.

Famous international financier George Soros has said that he is “very cautious” on China.

Last week, former IMF chief economist Professor Ken Rogoff predicted that the China bubble will bust “within ten years”, sparking a regional recession and hammering commodity exporters.

Despite measures being taken by the Chinese central authorities, leading authorities on Asian economics say that the China real estate bubble cannot be cooled, as it is being driven by trillions of dollars borrowed for speculative, leveraged investments by local municipal governments.

In Australia, our economic authorities are again asleep at the wheel, having confidently predicted a “Golden Age” of “unprecedented prosperity” from a multi-decade mining boom.

Barnaby is right.

Overheating China Can’t Be Cooled

1 Mar

China’s rapidly overheating real estate bubble cannot be cooled, lending further weight to predictions that the Chinese economy will bust inside ten years:

Even among Western analysts who live and work in China, the major role played by municipal governments in fueling China’s increasingly speculative real estate boom is underappreciated. The actions of those local authorities are at the heart of China’s property bubble, and they explain why the central government’s attempts to cool lending and construction are failing.

The key difference between China’s current real estate bubble and the U.S. bubble that popped in 2007 is this: In the U.S., it was individuals and lenders who made overleveraged, speculative bets via subprime mortgages. In China, explained Northwestern University researcher Victor Shih to NPR, the leveraged debt fueling the speculation comes from local governments, which have borrowed trillions of dollars worth of funds from China’s banking system to develop real estate projects in their jurisdictions.

Rudd Labor, Treasury Secretary Ken Henry, RBA Governor Glenn Stevens, and a lazy, blinkered mainstream media can no longer try to blame Barnaby Joyce’s warnings for scaring off the Sino-cyclical angel on which they have pinned all their hopes for economic prosperity.

After all, there is a growing chorus of leading international economists and financiers all around the world who are warning of a China implosion.  Perhaps our talking-head economic commentators, and the EPIC FAILURES currently in charge of the Australian economy, would like to start ridiculing and smearing all of them too?

%d bloggers like this: