When will the China bubble pop?

After reading this Economics thread discussed on ET, "The powerful State Council, China's cabinet, is headed by Premier Li Keqiang. The demand for the audit was "urgently" issued Friday afternoon, the People's Daily, newspaper of the ruling Communist Party, said on its website citing a source."

http://www.theaustralian.com.au/bus...-government-debt/story-e6frg90f-1226687136510
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China orders audit of government debt

CHINA has called for an audit of all government debt, the national auditor has announced, as concerns grow over official liabilities in the world's second-largest economy.

...

The International Monetary Fund earlier this month estimated that the combined obligations of both central and local governments stood at 45 per cent of China's gross domestic product.
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Quote from OddTrader:

Among many countries, China still has the relatively low and healthy Public/ External Debt to GDP ratios: only 25% and 7%.

http://www.elitetrader.com/vb/showthread.php?s=&postid=3846246#post3846246
More...
 
I do not consider China to be a bubble but a real growth story given the labor price advantages it had for last 3 decades. However, 10% growth rates can slow down to 5-6% easily.

Also any growth story can get overextended and require some sort of correction.

China has vast foreign currency reserves fully intact. Also its currency is not convertible and hence any market sentiments will not cause 1998 type currency crisis that happened in Asia.

China being a command and controlled economy will do its best to hide the truth and post a false picture of numbers etc. in order for markets to not go into 'stampede for exit' mode.

Problem with China is vast majority of its population is still 'hand to mouth' and hence any stimulus cannot result in large demand for products by majority of consumers.

There is a political danger to Commies from the majority poor population and egypt or libya like scenario can be replayed in Beijing if a definite slide in economic picture shows up.
 
In the last week the 1 month Shibor rate began to rise again at 5.70% (from 4%). The stress on the credit is coming back…
 
Quote from toc:

I do not consider China to be a bubble but a real growth story given the labor price advantages it had for last 3 decades. However, 10% growth rates can slow down to 5-6% easily.
More...

An economy of that size, even 0% or 1% annual growth year after year is still a huge production value.

I think perhaps the key point is whether it can be actually decoupled against other major economies when they encountering crisis.
 
Best way to approach China's GDP figures: Ignore them!
http://articles.economictimes.indiatimes.com/2013-07-16/news/40613414_1_gdp-east-china-sea-growth

" Here's the best way to approach China's GDP figures: ignore them. Things in the world's second-biggest economy are much worse than they appear. Even if we take the 7.5 per cent April-June growth rate at face value, its components suggest a more ominous scenario.

Industrial production, for example, rose just 8.9 per cent in June compared with May's 9.2 per cent gain. For an export-addicted, developing economy, those are anaemic increases. It doesn't take a vivid imagination to see how that will crimp consumption and income growth in the second half of 2013.

Stage-Managed Data

But what's really at issue here is an unhealthy obsession with GDP numbers that tell us very little. What difference does it make if Beijing says it's growing 7.7 per cent or 7.5 per cent China's level of output at the moment is certainly lower than any of these numbers. Just ask the factory-floor workers or electricity providers coping with the realities of fast-slowing Chinese demand.

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China's Q2 GDP growth slows to 7.5%

http://www.china.org.cn/business/2013-07/15/content_29425377.htm

http://www.china.org.cn/business/2013-07/15/content_29422005.htm

Slow growth only certainty in unpredictable climate

http://www.china.org.cn/opinion/2013-07/28/content_29541270.htm

China's land market gets into gear in Q2: report

http://www.china.org.cn/business/2013-07/29/content_29556606.htm

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China's land market regained steam in the April-June period after a quiet first quarter, with real estate investment picking up speed, according to an analysis report published by the Ministry of Land and Resources yesterday.

The Q2 composite index for the China Land Index, released by the ministry's center of land and mineral legal affairs to gauge the health of the overall land market, increased 17.4 percent from the previous quarter, or 19 percent from the same period last year, the report showed.

It marked a rebound from the first three months, when the CLI witnessed a fall in major indices after the central government rolled out a string of measures to cool the country's red-hot property market at the beginning of the year.

During the April-June period, the property market climate sub-index for CLI jumped 29.5 percent from the previous quarter, or 11.4 percent from the same period last year, landing in an interval that points to "overheated development," the report said.

The climate sub-index was mainly pulled up by mounting investment in the property sector, which increased 91.4 percent quarter on quarter and 23.8 percent year on year, according to Sun Yinghui, the center's director.

Sub-index for the land market scale was also up 26 percent from the previous quarter, or 20 percent from the same period last year, indicating a stubborn demand on the land market, said the report.

In the first half, both supply and demand for the land for real estate remained strong, showing that a policy to simply expand land supply to curb property prices is hardly sustainable, said Sun.

"

http://www.china.org.cn/business/node_7074865.htm
 
In response to the ET readers' interests in this thread,
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China's top leadership says it will guarantee that the 7.5 percent growth target for this year will be met, despite the continuing economic slowdown.

President Xi Jinping made the remark on Tuesday when he chaired a meeting of the Political Bureau of the Communist Party of China's Central Committee to lay out the economic strategy for the second half of the year.

http://www.chinadaily.com.cn/china/2013-07/31/content_16857537.htm

China able to meet annual growth target
Updated: 2013-07-31 15:37
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Also,

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http://www.chinadaily.com.cn/opinion/2013-07/31/content_16855532.htm

Misreading Chinese rebalancing

Slowly but surely, the next China is coming into focus. China doubters in the West have misread the Chinese economy's vital signs once again.

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