When will the China bubble pop?

[zdreg]

Quote from pma:

I will be a buyer of FXP if and when we can make it to single digits and/or there is some headline news on how great China is doing.

"I will be a buyer of FXP if and when we can make it to single digits "

what do you by make?

 

[elisab]

Still bad news coming from China: http://www.zerohedge.com/news/2013-...-11-month-low-employment-weakest-over-4-years

 

[OddTrader]

When will the China bubble pop?

2015~2020

 

[elisab]

Interbank rates are rising again in China .... http://www.zerohedge.com/news/2013-07-25/how-deep-real-economic-problem-china

 

[4thaugust1932]

China bubble will pop win Fed stops https://en.wikipedia.org/wiki/Quantitative_easing#Printing_money

 

[OddTrader]

http://www.news.com.au/world-news/c...lion-to-cut-smog/story-fndir2ev-1226685290084

China to spend $300 billion to cut smog
"
CHINA'S government plans to spend 1700 billion yuan ($302 billion) to tackle air pollution over the next five years, after smog became a major source of social discontent. "

 

[doublet83]

Quote from OddTrader:

http://www.afr.com/p/national/northern_china_city_of_ghosts_b6b9ymGVdV7qu5jeK2qmDI

Northern China’s city of ghosts
Q

Only five of the 43 projects in the first phase of development have been completed, but over the next 18 months to two years, property group DTZ estimates 1.57 million square metres of office space will be available for lease. If all the projects now under construction are completed, then double this amount will come onto the market. That’s equivalent to 60 per cent of Sydney’s CBD office space.

Yet Crystal Hao, an analyst from DTZ, estimates annual demand in Binhai is only 60,000 square metres. “That’s why we are not very confident about its prospects,” she says drily. At current rates of growth it will therefore take 53 years to fill all the available space. But that is just a fraction of what has been planned. The grand vision is to build a CBD with more than 10 million square metres of office space – double the Sydney CBD. As part of this vanity project there will be three landmark towers taller than 500 metres or 100 storeys, including Binhai’s very own Rockefeller Centre.

“There is a massive oversupply,” says Gao. “It’s totally irrational.”
UQ

http://en.wikipedia.org/wiki/Binhai_New_Area

Q
http://thechinachronicle.com/chinas...-to-be-bigger-and-better-than-the-real-thing/

When finished, Yujiapu and the area across the Hai River immediately adjacent to it is slated to provide 15.2 million square meters (164 million square feet) of office space. Though larger in surface area, Yujiapu only intends to offer a little over a third of Manhattan’s business capacity.
UQ

http://thechinachronicle.com/chinas-ghost-cities/

One thing I've never understood about this theory of massive housing oversupply: I have been to China many times and everything is crowded as hell and never once have I seen anything resembling a ghost city. Despite all this alleged oversupply, housing prices are ridiculously expensive. The most expensive houses (calculated based on median income versus median home price) in the world are in Chinese cities. This is despite the fact that consumers take out relatively conservative mortgages by western standards, and consumers tend to have a savings rate of 30%, versus zero in the US.

Furthermore, you have the government trying to slow down the housing market by putting restrictions on lending and buying..can you imagine the US government having the foresight to do this before the US housing bubble?

I'm sure there are some overbuilt projects in some rural cities. But how prevalent is it? No one knows..there is no hard data, only speculation. This is inefficiency, just like how US construction has inefficiencies too. The use of overpriced union works is one such example. Building these rural 'ghost towns' actually cost very little because of loose building codes, and very cheap, very hard working rural workers.

 

[EON Kid]

the China bubble lemmings

 

[OddTrader]

Quote from doublet83:

One thing I've never understood about this theory of massive housing oversupply: I have been to China many times and everything is crowded as hell and never once have I seen anything resembling a ghost city. Despite all this alleged oversupply, housing prices are ridiculously expensive. The most expensive houses (calculated based on median income versus median home price) in the world are in Chinese cities. This is despite the fact that consumers take out relatively conservative mortgages by western standards, and consumers tend to have a savings rate of 30%, versus zero in the US.

Furthermore, you have the government trying to slow down the housing market by putting restrictions on lending and buying..can you imagine the US government having the foresight to do this before the US housing bubble?

I'm sure there are some overbuilt projects in some rural cities. But how prevalent is it? No one knows..there is no hard data, only speculation. This is inefficiency, just like how US construction has inefficiencies too. The use of overpriced union works is one such example. Building these rural 'ghost towns' actually cost very little because of loose building codes, and very cheap, very hard working rural workers.

I think you have very good observation and understanding. My guess is it would be possible that there could be a mini boom (perhaps up 20+%) first for China's property market in these two years before the foreseeable bubble really bursts (say down 35+%). An article says it would probably start from China Hong Kong or South East Asian countries http://snakeln.wordpress.com/ .

Quote from OddTrader:

When will the China bubble pop?

2015~2020

 

[pikachu9]

Quote from doublet83:

One thing I've never understood about this theory of massive housing oversupply: I have been to China many times and everything is crowded as hell and never once have I seen anything resembling a ghost city. Despite all this alleged oversupply, housing prices are ridiculously expensive. The most expensive houses (calculated based on median income versus median home price) in the world are in Chinese cities. This is despite the fact that consumers take out relatively conservative mortgages by western standards, and consumers tend to have a savings rate of 30%, versus zero in the US.

Furthermore, you have the government trying to slow down the housing market by putting restrictions on lending and buying..can you imagine the US government having the foresight to do this before the US housing bubble?

I'm sure there are some overbuilt projects in some rural cities. But how prevalent is it? No one knows..there is no hard data, only speculation. This is inefficiency, just like how US construction has inefficiencies too. The use of overpriced union works is one such example. Building these rural 'ghost towns' actually cost very little because of loose building codes, and very cheap, very hard working rural workers.

I've been to China on different occasions the past several years. Every time I go I can't help but notice the numerous cranes next to newly developing skyscrapers. Their massive infrastructure spending and construction has been going on for years fueling their economy. I think the anecdotal reports of overbuilding are true. Furthermore, the price of copper tells part of the story. Classic head and shoulders topping pattern that's barely holding on to 3.00 support level. I think the breaking of that support would be concurrent with the anticipated hard landing in China. China in past years has accounted for ~ 40% of copper demand worldwide.