#evergrande crisis | Explore Tumblr Posts and Blogs

abr · 8 months

Text

Semplificando, possiamo dire che il “miracolo cinese” degli ultimi trent’anni si è basato principalmente su due settori: lo sviluppo immobiliare e le infrastrutture. (...) (T)ra il 2008 e il 2021, in media, il 44 per cento del PIL cinese è stato generato da investimenti interni (...), questa cifra era arrivata a sfiorare il 60 per cento. (...).Questa strategia (...) consente di creare moltissimi posti di lavoro (...). Basare la propria economia sugli investimenti significa che lo stato, le amministrazioni locali e le imprese private (drenano) enormi quantità di denaro per finanziare progetti. (...) In Cina, peraltro, gran parte delle banche è di proprietà pubblica (...). Questo modello di sviluppo (...) è piuttosto comune in molti paesi in via di sviluppo (...). Nelle economie mature (...) gli investimenti sono meno della metà di quelli della Cina (20% del PIL negli Stati Uniti), e il grosso del PIL è generato invece dai consumi interni: negli Stati Uniti il 68% (cittadini che comprano beni e servizi) mentre in Cina è appena il 38 per cento. (Il problema di una strategia di sviluppo fondata sugli investimenti infrastrutturali è che prima o poi finiscono) le cose da costruire che siano un investimento produttivo. (...) (L)e grandi compagnie di sviluppo immobiliare come Evergrande e Country Garden hanno (...) preso in prestito dalle banche soldi per costruire complessi residenziali ma poi (...) non li hanno venduti. Le compagnie non sono riuscite a rientrare delle spese, e il prestito (...) si è trasformato in un debito. L’aumento del debito ha riguardato tutta l’economia cinese (...). Oggi il debito complessivo della Cina (il debito pubblico, delle imprese, dei privati) ammonta a circa il 270 per cento del PIL. È una cifra paragonabile al debito di economie mature come gli Stati Uniti ma (...) il debito della Cina sta crescendo più rapidamente ed è meno sostenibile (PIL pro capite di 12 mila dollari contro i 76 mila degli Stati Uniti). (...) Buona parte del dibattito che si è sviluppato in questi mesi tra gli analisti e gli esperti riguarda dunque quanto sia profonda la crisi cinese, e in che modo (e a quale prezzo) la Cina potrà uscirne. (...) Per il regime autoritario cinese la preoccupazione di mantenere la stabilità sociale e di rimanere saldo al potere, oltre che la volontà di rendere la Cina un paese sempre più rispettato e aggressivo all’estero, ormai sopravanza la preoccupazione di riformare l’economia. (E') la strada già percorsa da molti regimi autocratici. (...) Altri economisti – (...) soprattutto in Cina –sostengono che se lo stato facesse di più per stimolare la domanda interna il grosso della crisi potrebbe essere evitato. Lo stato, sostengono, dovrebbe (...) mettere più soldi nelle mani dei cittadini, che in questo modo potrebbero consumare di più (...). Lo stato dovrebbe inoltre adottare misure di welfare simili a quelle dei paesi occidentali per creare un sistema sociale in cui la popolazione è sicura e ha le garanzie e la tranquillità necessarie per spendere i propri soldi. (Ma) il regime cinese (...) è fortemente contrario ad adottare nuove politiche di welfare: «i sostegni sociali in stile occidentale incoraggerebbero soltanto le persone a essere più pigre».

via https://www.ilpost.it/2023/09/01/modello-cina-crisi-economica/

Molto interessante, sul conundrum in cui si sta cacciando fatalmente la Cina, il riferimento per i Benecomunisti Statalisti tutti Ordine e Disciplina Il Lavoro Rende Liberi (avete presente Mattarella?).

Fantastico vedere il fallimento alla lunga del modello keynesiano ("prima o poi le cose da costruire che siano un investimento produttivo, finiscono"). incredibile ascoltare la musica del "meno soldi allo stato, più in tasca ai cittadini" (mica solo per consumare come vorrebbero i benecomunisti anche da noi) e come loro stessi skifino una eventuale evoluzione socialdemocratica: : «i sostegni sociali in stile occidentale incoraggerebbero soltanto le persone a essere più pigre».

Tutto questo rafforza la mia convinzione: gira e rigira non si scappa, il LIBERO MERCATO è l'unico punto di equilibrio cui naturalmente tendono gli organismi economici quindi sociali quando finiscono le droghe, punto a capo.

22 notes · View notes

mariacallous · 8 months

Text

For the last three decades, the Chinese economy has resembled an impressionist painting: beautiful from afar, but a jumbled mess up close. China’s economic model has centered around investment-led growth made possible by the supply of cheap capital extracted through domestic financial repression, using a combination of policies—such as interest rate caps, capital controls, and restrictions on credit allocation directions and financial market entry—to channel capital into state-prioritized sectors. While this model has contributed to China’s rapid rise, it has also led to the entrenchment of structural issues that began to emerge well before President Xi Jinping assumed power in 2012. Instead of taking the chance for reform, though, Xi’s policies have only worsened these issues.

China faces three major structural challenges that expose it to the risk of economic stagnation akin to Japan’s “lost decades”: Escalating debt coincides with decelerating growth, sluggish household consumption lags overextended supply, and adverse demographic trends have blunted China’s edge in cheap but skilled young labor, which amplifies social welfare costs and causes housing market demand to dwindle. The inevitable reckoning of China’s structural challenges has been accelerated since Xi’s ascendence.

The fuse on this economic time bomb is steadily shortening. In recent months, critical economic indicators—from industrial profits and exports to home sales—have all recorded double-digit percentage declines. In July, while consumer prices rose globally, they fell in China, raising concerns that deflation could worsen the difficulties faced by heavily indebted Chinese companies. A convergence of idiosyncratic factors now threatens to ignite a crisis in the property and construction sector, which makes up nearly 30 percent of Chinese GDP. China Evergrande’s recently filed for bankruptcy. Coupled with the impending default of Country Garden, another major property developer, after missed bond payments this month, it has deepened the already profound sense of uncertainty and fear among the business community.

This economic uncertainty is further heightened by the Chinese Communist Party’s ever-shifting targets of anti-corruption and anti-espionage campaigns. Health care is the latest sector to fall under the gaze of authorities, even as the effects of previous campaigns against tech, private education, gaming, and finance still linger. In the background, the friction between China and the United States continues largely unabated. Private conversations among Chinese citizens, particularly the young, reveal an undercurrent of pessimism and unease. Among the contributing factors is the looming specter of military conflict with the West regarding the future of Taiwan. China’s one-child generation would shoulder the weight if such a conflict were to happen, an existential threat of unparalleled proportions.

Milton Friedman was partially correct when he famously stated that “[i]nflation is always and everywhere a monetary phenomenon.” In China, the manifestation of economic deflation symptoms—even transitory—has been shaped by Xi’s departure from the reform and opening up policy and the return of expansive political, ideological, and geoeconomic aspirations reminiscent of the Mao Zedong era. We might dub the resulting phenomenon “Xi-flation,” deflation with Chinese characteristics. The cumulative policy shocks of the last five years have exacerbated, rather than quelled, the structural challenges that have been dragging—but not crashing—China’s growth.

The posture of China’s teetering-but-not-tumbling growth trajectory has long called for careful structural reform. The goal should be to squeeze out the property market bubble without bursting it, to alleviate income inequality without stifling entrepreneurship, and to foster fair competition without hurting productivity. The success of these reforms hinges on a calibrated policy orchestration. Instead, Xi’s policy has produced grandiose political rhetoric, such as “common prosperity” or “shared human destiny,” mixed with clumsy and misguided enforcement.

Economically, Xi has been a bull in a china shop. His economic policies have often shifted focus but always emphasize the party’s overarching control across nearly all dimensions of China’s economic and financial activity. Since 2017, foreign companies operating in China have organized lectures for employees to study the role of the party and Xi speeches. As of October 2022, 1,029 out of the 1,526 of the mainland-listed companies (more than two-thirds) whose shares can be traded by international investors in Hong Kong acknowledge “Xi Thought” in their corporate constitutions and have articles of association that formalize the role of an in-house party unit.

In fairness, Xi did not create China’s structural woes. However, the reform and opening up policy suffered a quiet, unheralded death as Chinese policy thinkers attempted to compensate for the absence of prudent economic strategy under Xi by ceaselessly leaping from one grand idea to the next under the banner of national rejuvenation.

For example, since December 2016, the phrase “houses are for living, not for speculation” has become the principle to curb the property sector. In 2017, the “thousand-year project” Xiong’an New Area was launched as a city of the future. In 2019, “establishing a new national system for innovation” entered the lexicon for state-led science and technology innovation. Since 2020, “common prosperity” has become the mantra behind which to launch antimonopoly and antitrust probes into China’s tech sector. And since November last year, when Xi suddenly reversed China’s zero-COVID policy, the new catchphrase has shifted to “consumption promotion.”

Xi-flationary policies have exacerbated China’s latent structural problems and rung up a steep tab. For instance, Xi’s regulatory crackdown on China’s leading tech companies wiped out more than $1 trillion in market value, a figure comparable to the GDP of the Netherlands. The zero-COVID policy incurred costs of at least 352 billion yuan ($51.6 billion) for Chinese provinces, almost twice the GDP of Iceland ($27.84 billion in 2022).

The financial cost of these policy missteps is not their worst aspect. The most profound cost of Xi-flation so far is an unprecedented run on confidence in the Chinese economy from within and without. Beijing’s old economic playbook has run out of pages when it comes to tackling this crisis. China cannot export its way out of today’s economic challenges or stimulate its way toward a full recovery without also addressing the underlying political cause. As China moves up global supply chains, foreign companies are increasingly looking for alternative countries to sources for inputs and locate production to ensure they do not fall on the wrong side of any lines drawn as part of Western policymakers’ drive to “de-risk” their reliance on China.

This is, in part, a belated reaction to the willingness of China under Xi to use economic coercion. Researchers from the International Cyber Policy Centre found that between 2020 and 2022, China resorted to economic coercion in 73 cases across 19 jurisdictions, a marked increase compared to China under Xi’s predecessors.

China’s waning comparative advantage is a long-term structural problem, but political and geopolitical factors drive the current run on confidence. As Xi continues to consolidate power, the once lucrative China premium will be further discounted due to the growing regulatory and geopolitical uncertainty. Chinese technocrats cannot fully address this run on confidence using only their limited economic toolbox, such as the People’s Bank of China’s use of the so-called precision-guided structural monetary tools to selectively provide credit for state-preferred sectors.

Xi’s global assertiveness has caused negative spillback for China’s economy. Amid China’s fraying ties with the West and multinationals hastening to diversify their supply chains, ordinary Chinese households are left to deal with mounting anxiety. They are economically less secure as a consequence of Xi’s zero-COVID policy, and they are increasingly concerned that geopolitical forces beyond their control have limited their individual futures. Xi’s commitment to reunite Taiwan with the mainland, by force if necessary, has created the perception among some in China that conflict is inevitable—the same as in the United States. This loss of confidence aggregates across hundreds of millions of Chinese households, underpinning an economic condition that James Kynge has characterized as a “psycho-political funk.”

An essential factor behind China’s economic success during the reform and opening up period was what economist John Maynard Keynes termed “animal spirits”—those emotional and psychological drivers that push people to spend, invest, and embrace risk. For decades, China not only benefited from the inflow of foreign direct investment and technology from the West, but also enjoyed a steady tailwind from the optimistic outlook of Western business leaders eager to capitalize on the globalization trend. When Western companies briefly reconsidered their involvement with China in the aftermath of the Tiananmen protests, Deng Xiaoping rescued the situation by embarking on his influential southern tour in 1992. During his tour, he the world of the party’s commitment to economic reform, stating, “It is fine to have no new ideas … as long as we do not do things to make people think we have changed the policy of reform and opening up.”

However, Xi’s policies have undone much of Deng’s legacy and upended China’s prior economic success formula. China’s appeal as a destination for both tourism and business has dimmed, and a growing number of the country’s elite look beyond the border for their future. If this trend continues, China may fall into the dreaded middle-income trap or face even graver risks such as a financial crisis. A financial crisis in China would have far greater consequences than any other previous emerging market crisis. The size of China’s economy and its level of integration dwarf that of South Korea in the late 1990s, when it was at the epicenter of the East Asian financial crisis.

The West has a genuine interest in preventing the economic downfall of China. Washington and Brussels must closely coordinate to ensure their de-risking policies send a clear message to Beijing on its intended goals and limits by drawing a bright red line around sectors with potential military dual use while clarifying in which circumstances cooperation is still encouraged. Otherwise, the West risks legitimizing Xi’s claims that economic containment is to blame for China’s economic woes, and that further self-sufficiency is the only antidote. The West must be careful to communicate that its policies are designed to avoid the global alienation of 1.4 billion Chinese people.

When the Asia-Pacific Economic Cooperation summit meets this November in San Francisco, the sister city of Shanghai, China’s economy may be on considerably less sure footing than the United States for the first time in decades. That may prove to be an opportune time for both countries to repair the world’s most consequential bilateral relationship.

The Biden administration can take a page from the playbook of Otto von Bismarck: “Diplomacy is the art of building ladders to allow people to climb down gracefully.” A good start would be for the United States to lend a ladder this fall and help China clean out its gutters—if a Xi-led China is capable of accepting the help.

4 notes · View notes

catgirl-kaiju · 7 months

Note

Please, I implore you to read this ask. The CCP should not be talked positively of. I say this as someone who is of Chinese heritage and have great pride in China’s long history. Their construction projects in other countries are shoddy and done with the expectation of paying back and with an expiration date, these projects were not built to last long. It’ll just keep these countries reliant on CCP aid. Their capitalism has bred companies like Shein who are not known for being ethical and Evergrande whose pyramid scheme might lead to an economic collapse and housing crisis. They’re erasing the relevance and history of other Chinese ethnicities to prop up the Han Chinese. Their dam projects are directly affecting their neighboring countries down south and causing low river flows. They’re using misinformation to rewrite recent history and gaslight people online by using bots and AI generated images like in the Hawaiian wild fires. They silence their own citizens and refuse to let them speak against the CCP by utilizing the social credit system. The governments of many other countries and even the UN are already bending backwards to acquiesce the CCPs demands. Many churches built and are continuing to build and run hospitals, schools, and orphanages but it’s clear they’re doing so for ulterior motives and many countries have already diminished their influence, so why does the CCP get a free pass?

Please don’t prop up the CCP. The USA sucks but it doesn’t mean you have to praise the CCP. I’m a socialist and the CCP cares not for the people, not even their own people, but for themselves.

hey anon, i assume you're referring to this post with this ask

it is my understanding of the post that it is not so much about glorifying the CCP, but pointing out that they have diplomacy strategies that work much more effectively for countries outside of the imperial core. there is no explicit endorsement of what they do with the good will that is built with these projects. the users here seem to be more expressing that, for better or for worse, it is understandable why these countries might be inclined to have a positive relation with China than, for example, the UK or the US

your comment, to me, is displaying a concerning lack of nuance when it comes to global politics. nations, states, and governments are far in a way too complex to be slotted into a traditional conception of good and evil. the CCP can be a horrible repressive government perpetrating an active genocide and also have good diplomacy strategies (even if there are strings attached). it's the same as how the US can be a horrible repressive government perpetrating active genocides and also provide helpful foreign aid (even if there are strings attached). nothing in the world of geopolitics is simple, and acknowledging that is crucial. i can be opposed to the CCP (and i am) and still acknowledge when they do positive things or when they are doing something more effective than other world superpowers.

this sort of thinking can lead people to conclusions like "It's good that the US dropped nukes on Hiroshima and Nagasaki, because Imperial Japan was a monsterous government guilty of horrific war crimes." when the reality is that you can be opposed to the bombings AND Imperial Japan at the same time.

#ask #anon #scout's brain

6 notes · View notes

nicklloydnow · 8 months

Text

“Is China about to have its ‘Lehman’ moment? After Chinese property developer Evergrande filed for bankruptcy protection in the U.S., that’s been the question some have whispered. The country’s debt crisis that’s rumbled on for two years is coming to a head, with China’s shadow bank sector now defaulting on payments.

(…)

Last week, Evergrande filed for protection in the U.S. under Chapter 15 of the bankruptcy code, which helps keep creditors at bay when a company is restructuring. Evergrande’s debt is held mainly by Western investors, hence filing in Manhattan.

It’s been at the center of the Chinese property sector’s debt crisis, which first unfolded in 2021 and has reared its head again this summer. Nearly two years ago, Evergrande defaulted on making interest payments on bonds, which sparked a set of failures across the Chinese property sector.

Companies accounting for roughly 40% of China’s home sales have now defaulted on debt since the crisis first unfolded. This has led to unfinished homes and ‘ghost cities’, supply chain disruptions and institutional investors out of pocket.

(…)

It’s not the only property developer struggling this week. China’s Country Garden Holdings is looking to restructure its bond repayments totaling $535 million over three years to stave off financial trouble.

(…)

Given real estate is estimated to make up 30% of China’s GDP, there are fears the contagion in China’s real estate market could spread and create a downward spiral of the property market depressing growth.

Last week, there were rare protests in Beijing after bank subsidiary Zhongrong defaulted on several investment products without immediate plans to repay its clients. Its parent company, Zhongzhi, manages $138 billion in assets, 10% of which are exposed to the real estate market.

Moody’s has previously stated that the increased amount of defaults from property developers has raised Chinese banks’ non-performing loan rate to 4.4% by the end of last year, up from 1.9% in 2020. China’s property sector is also considered the world's largest asset class, worth around $62 trillion, so any further signs of trouble could lead to the Chinese government intervening.

(…)

As for the Hang Seng Index in Hong Kong, it’s officially entered a bear market. Around half the stocks on the index are now oversold, and it’s lost 11% of its value in August so far, which sets the scene for the Hang Seng’s worst performance since October.

The fear has spread to the U.S. markets in August, with the S&P 500 suffering three straight weeks of decline. The Nasdaq lost 5.5% in value in the same period, while the Dow Jones has seen a 3.2% decline.

Several banks have also downgraded China’s GDP growth outlook, which was previously estimated at 5% for 2023. Nomura now predicts 4.8% growth, with the likes of Morgan Stanley, JPMorgan and Barclays all following suit.”

“Country Garden Holdings Co., the distressed Chinese developer that earlier this month missed interest payments on some dollar bonds, is leaving investors in the dark about the exact date the grace period ends.

That’s adding to signs of opaqueness in the nation’s offshore junk debt market, which has lost $87 billion in the past two years.

One of China’s biggest developers, Country Garden must repay a combined $22.5 million in two coupons within the grace period, otherwise creditors could call a default that would be the developer’s first on such debt. That would threaten even worse impact than defaulted peer China Evergrande Group given Country Garden has four times as many projects.

(…)

China’s worsening property debt crisis has prompted a slew of developers including Evergrande to use grace periods in recent years. In many cases, doing so has only bought time before they eventually went on to default, adding to record debt failures.

Growing concerns that the same fate could strike Country Garden, which had 1.4 trillion yuan ($192 billion) of total liabilities at the end of last year, have dragged Chinese junk dollar bonds deeper into distress under 65 cents. The market value of Bloomberg’s index for the securities, mostly issued by builders, has shrunk to only about $44.7 billion from some $131.8 billion two years ago.”

#evergrande #bankruptcy #china #economy #contagion #realestate #country garden

2 notes · View notes

digitalguap · 8 months

Text

Evergrande's Implosion: Debunking China's Impending Collapse

In this blog post, the focus will be on debunking China’s impending collapse through the lens of Evergrande’s implosion. The author delves into the factors contributing to the current situation, exploring the potential consequences and offering insights into the overall stability of the Chinese economy. By examining the challenges faced by one of China’s prominent real estate giants, this article…

View On WordPress

0 notes

argumate · 1 year

Text

China Evergrande Group will end the year with new home sales of about 5 to 7 per cent of its annual levels before a cash crunch plunged the developer into a crisis that threatened its survival. A debt restructuring plan promised to offshore creditors remained elusive.

sales down by over 90%

7 notes · View notes

upcomingtradera · 17 days

Text

#day trading #futures trading #investing #investors #investments #finance #personal finance #financial literacy #volumeprofile #marketprofile #order flow #trader #stock market #emini

0 notes

gqresearch24 · 20 days

Text

Shimao Group Faces Liquidation Petition Amidst China's Property Sector Turmoil

(Source-constructionworld.in)

Creditors Take Legal Action

Shanghai-based real estate titan Shimao Group is the latest casualty in China’s tumultuous property market as it grapples with mounting debt and creditor pressure. On Monday, the company disclosed receiving a liquidation petition from a Chinese state-owned bank, marking another instance of creditors resorting to legal measures to recoup funds from troubled developers in the world’s second-largest economy.

Shimao Group Legal Petition and Financial Implications

According to a filing with the stock exchange, China Construction Bank (Asia) filed a “winding-up petition” against Shimao Group on April 5 in Hong Kong. The petition, citing a financial obligation of approximately HK$1,579.5 million ($204 million), underscores the deepening financial woes facing the property giant. Despite the legal action, Shimao Group has asserted its intention to vigorously oppose the petition while simultaneously striving towards an offshore restructuring aimed at maximizing value for its stakeholders.

Roots of Shimao’s Debt Woes

Shimao Group’s debt predicament traces back to July 2022, when it defaulted on interest and principal payments on a $1 billion bond. This default has precipitated a sharp decline in the company’s share value, plummeting over 14% in Hong Kong on Monday and nearly 40% year-to-date. The company’s challenges mirror those of numerous Chinese developers entangled in a crisis sparked by government measures to curb excessive borrowing, aimed at deflating the property bubble.

Impact on China’s Economy

The ripples of China’s real estate turmoil are reverberating throughout the nation’s economy. The real estate sector, once a pillar of growth, has now become a drag on broader economic recovery efforts. Lingering effects from pandemic lockdowns compounded with challenges like record-high youth unemployment and financial strains at local government levels intensify the gravity of the situation.

Evergrande’s Precedent and Ongoing Concerns

The plight of Shimao Group echoes the dramatic saga of Evergrande, the emblematic face of China’s property crisis. In a landmark decision, Evergrande was ordered to liquidate by a Hong Kong court in January. The failure to reach a debt restructuring agreement after 19 months of negotiations underscores the complexities and uncertainties surrounding the fate of investors, employees, and homebuyers entangled in the fallout.

Industry-wide Struggles

Shimao Group’s tribulations are not unique within the sector. Country Garden, another prominent developer, faced a similar fate after defaulting on its debt last year, prompting a liquidation petition from a creditor in February. As the domino effect of defaults and legal actions unfolds, the broader implications for China’s economy remain uncertain, with stakeholders anxiously awaiting resolution amidst the ongoing turmoil in the property market.

Also Read: Ripple CEO Forecasts Crypto Market to Surpass $5 Trillion

#ShimaoGroup #ChinaPropertyMarket #RealEstateCrisis #DebtWoes #EconomicImpact

0 notes