Phase One trade deal, for China it is all about technology war

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17 hours ago, Douglas Buckland said:

Not really. It depends on what is actually being done with the concrete. Building cities which nobody lives in is not the most effective infrastructure project (for example).

Douglas, build and they will come.

I remember one anecdote about infrastructure.

When Chinese started to built expressways in mid 1990s, the number of cars on the streets was very small. Total number was much smaller than Canada, production 1/10 or 1/20 of US.

There were many angry voices: "Why you spend money on such an expensive venture, why you build 4 lanes expressways (2 lanes each way)"

15 years later, there were also angry voices: "Why you have not built 8 lanes expressways, a lot of reworking is so expensive"

But at that time China already manufactured more than double US annual vehicle production.

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“Douglas, build and they will come.”

That is called ‘speculating’ and carries a high risk. It is silly to believe that simply because you build apartments and offices that people will rush to fill them.

Take a look at the residential and office space ‘bubble’ in Kuala Lumpur as we speak...as one example.

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2 hours ago, Douglas Buckland said:
 

“Douglas, build and they will come.”

That is called ‘speculating’ and carries a high risk. It is silly to believe that simply because you build apartments and offices that people will rush to fill them.

Take a look at the residential and office space ‘bubble’ in Kuala Lumpur as we speak...as one example.

I never followed the problem of ghost cities in detail, I am not aware of any reliable sources with exact data, these were only rumours by journalists with agenda.

Chinese urbanization is a unique event in all human history, never before and after such a large human migration venture was conducted. And this was done in perfect way, No slums, Urban people have good jobs. It is a marvelous achievement of the Chinese state. On average 20 million new city dwellers every year. They create 13 million Urban jobs. Build 1 class infrastructure of every type for them. If during this huge and succesfull venture 5000 km of unnecessary expressways or 30 million unnecessary flats were built it is a drop in a total effort. Again I have not spotted reliable source of such claims. With 95% probability I can say such claims are false cause they will surface in other parts of economy. Like 30 million of unnecessary apartments about 10% of Chinese Urban housing stock, would appear as 3-4 trillion USD problem of NPLs and as bancruptcies of majority of Chinese developers and so on. Even very strong Chinese state would not be able to hide 3 trillion USD malinvestment problem or the very information about existence of such a problem. So I say most of it is Unsubstantiated rumours, but if anybody here is aware of any reliable sources mentioning about it, with data, Please comment about it here. I am very anxious to research about this subject. 

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21 hours ago, Rob Plant said:

I find this extremely hard to believe as @Douglas Buckland has noted these ventures would require huge investment and agreement with local government for the land and surrounding infrastructure. Please provide details of who these "independent" contractors are/were.Why would banks finance these projects where there is no evidence of any return (ie nobody is living in them and paying rent). In my experience commercial banks aren't stupid and need a pretty watertight business plan with projected returns over a specific time-frame in order to invest.

Most of the projects are privately funded and a large portion is funded from HK in dollars. The central planning is in provincial governments providing target development scale and coordinating utilities. The funding and construction are private in most cases. 80% of Chinese net worth is in real estate. The government has been fighting speculation by restricting financing for 2nd and 3rd homes etc. for years, which is why so much of the mortgage financing goes through HK. The construction and development companies have been hitting snags as people failed to show up into the new cities and divisions the way they had before. During the urbanization period it was absolutely necessary to build well ahead of people coming in. Private investors (many very small) would buy the new construction from the developers ahead of the incoming migrations, then make money as the new population buys the apartments. It worked for decades, with some interruptions. Provincial owned development companies do exist, but it isn't how it operates as a rule. 

What is different is that the populations don't show up as fast as they had, so vacancies continue far longer than in the past. Speculators are stuck with old apartments that are not yet occupied and are concerned with market value drops, which might put some of them underwater. In the meantime, as so many speculators are stuck with slow moving properties, they are showing up less often to developer's new projects. Since banks are so heavily exposed and provinces still expect further urbanization, many overbuilt provinces and municipalities have instituted uptick rules for property sales. Meaning that you can only sell a property for more than the last sale in the building. Many areas have thus seen a severe drop in sales, as a bid at a higher price is often not forthcoming. So both developers and investors can't free up capital and some have gone under as a result. 

Nikkei reports that 65 mil. units are vacant in tier 2  and 3 cities at end 2017, Housing in tier 1 cities is still very expensive and rents provide about a 2% return as the real estate is unaffordable at current income levels. Unfortunately for the inland construction projects, the development programs are not successful in coaxing business and employees to leave congested industrial coastal metros despite offers of free electricity and free vocational training. Business prefers to stay in proximity to their network of suppliers customers and logistics despite the major reduction in real estate costs available, all the freebies and lower living costs.

The problem is becoming greater over time as the discrepancy between projected births and urbanizing migration and what has actually happened keeps growing. Attempts to stop further construction have strained economic growth and resulted in stimulus spending on infrastructure, with falling utility. It doesn't help that fake statistics from the municipal and provincial levels exaggerate births, economic growth and maintain migration expectations despite the prior ones having failed due to miscounting births a decade or two  before, and smaller numbers leaving their rural lives permanently (many go to the megacities to work and live in dormitory conditions to send money home, where they return when local employment or farm productivity grow sufficiently to make a living, or come back to retire). By some statistical checks, the birth statistics errors are growing as reported births are 2 million above the number of school enrollments 5 years later, up from 1 million earlier in the decade. IIRC. . 

The growing scale of the overbuilding or premature construction is resulting in a 70% share of unpaid interest refinancing in new lending. Meaning that essentially the whole of the China banking portfolio is non-performing to some extent. There are only a few years left where net savings inflows from China's boomers can cover the missing interest payments. At some point enough of them will be drawing on their savings in retirement so that the banking system becomes cash flow negative and has to be restructured. .. 

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3 hours ago, Marcin2 said:

I never followed the problem of ghost cities in detail, I am not aware of any reliable sources with exact data, these were only rumours by journalists with agenda.

Chinese urbanization is a unique event in all human history, never before and after such a large human migration venture was conducted. And this was done in perfect way, No slums, Urban people have good jobs. It is a marvelous achievement of the Chinese state. On average 20 million new city dwellers every year. They create 13 million Urban jobs. Build 1 class infrastructure of every type for them. If during this huge and succesfull venture 5000 km of unnecessary expressways or 30 million unnecessary flats were built it is a drop in a total effort. Again I have not spotted reliable source of such claims. With 95% probability I can say such claims are false cause they will surface in other parts of economy. Like 30 million of unnecessary apartments about 10% of Chinese Urban housing stock, would appear as 3-4 trillion USD problem of NPLs and as bancruptcies of majority of Chinese developers and so on. Even very strong Chinese state would not be able to hide 3 trillion USD malinvestment problem or the very information about existence of such a problem. So I say most of it is Unsubstantiated rumours, but if anybody here is aware of any reliable sources mentioning about it, with data, Please comment about it here. I am very anxious to research about this subject. 

https://asia.nikkei.com/Spotlight/Cover-Story/China-s-housing-glut-casts-pall-over-the-economy

https://www.bloomberg.com/news/articles/2017-03-23/the-controversial-chinese-economist-uncovering-tough-truths

https://www.scmp.com/comment/insight-opinion/article/2187551/chinas-commercial-property-market-thriving-even-residential It seems that China's retail sector is being Amazon'd. That is the only reason one would see retail properties vacant while warehouses are filling up. 

Prof. Gan's team at Chengdu should be doing another survey soon so we can get up to date numbers. I was expecting one to complete last year, but have not seen data yet. 

Data are also collected for Moody's and CBRE 

I suggest you look up Kyle Bass' presentations on the subject of China real estate and the state of banking. He has quite the argument to make. 

Your expectation of a planned economy mixed with a wild West private sector producing consistently good decisions is more deserving of the 95% probability of error. Your position appears to be that reading official statistics from a communist controlled country is sufficient to obtain a picture of what is going on there. Official stats need to be assessed as to bias and trend of error. It is the official stats that are unsubstantiated. Use private market surveys like Caixin or Markit etc. Or reports from the "truth to power" economists trying to nudge the party towards economically useful decisions and provide statistics that the NBS or its provincial suppliers of data do not want to pass on to the leadership.. 

You are being Naive. Do some homework and get a realistic picture. 

China is the biggest credit bubble in history. It is a colossal malinvestment in economic terms. They rushed ahead, building upstream industrial capacity to feed the rapid buildout of infrastructure, housing, retail and office space with no consideration of long term profitability Now that they have built up what they needed, that basic industry is just a useless albatross, with no market for its products. e.g. It produces steel of lower market value on the global market than the  expensive Australian and Brazilian  iron ore it was made of. 

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On 1/17/2020 at 9:07 AM, frankfurter said:

Please cite just one proven incidence of such theft. 

The Rip off of the F35 design and other U.S. military designs because the Chinese are U.N. original in development of anything on there own!

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On 1/23/2020 at 8:58 AM, 0R0 said:

Most of the projects are privately funded and a large portion is funded from HK in dollars. The central planning is in provincial governments providing target development scale and coordinating utilities. The funding and construction are private in most cases. 80% of Chinese net worth is in real estate. The government has been fighting speculation by restricting financing for 2nd and 3rd homes etc. for years, which is why so much of the mortgage financing goes through HK. The construction and development companies have been hitting snags as people failed to show up into the new cities and divisions the way they had before. During the urbanization period it was absolutely necessary to build well ahead of people coming in. Private investors (many very small) would buy the new construction from the developers ahead of the incoming migrations, then make money as the new population buys the apartments. It worked for decades, with some interruptions. Provincial owned development companies do exist, but it isn't how it operates as a rule. 

What is different is that the populations don't show up as fast as they had, so vacancies continue far longer than in the past. Speculators are stuck with old apartments that are not yet occupied and are concerned with market value drops, which might put some of them underwater. In the meantime, as so many speculators are stuck with slow moving properties, they are showing up less often to developer's new projects. Since banks are so heavily exposed and provinces still expect further urbanization, many overbuilt provinces and municipalities have instituted uptick rules for property sales. Meaning that you can only sell a property for more than the last sale in the building. Many areas have thus seen a severe drop in sales, as a bid at a higher price is often not forthcoming. So both developers and investors can't free up capital and some have gone under as a result. 

Nikkei reports that 65 mil. units are vacant in tier 2  and 3 cities at end 2017, Housing in tier 1 cities is still very expensive and rents provide about a 2% return as the real estate is unaffordable at current income levels. Unfortunately for the inland construction projects, the development programs are not successful in coaxing business and employees to leave congested industrial coastal metros despite offers of free electricity and free vocational training. Business prefers to stay in proximity to their network of suppliers customers and logistics despite the major reduction in real estate costs available, all the freebies and lower living costs.

The problem is becoming greater over time as the discrepancy between projected births and urbanizing migration and what has actually happened keeps growing. Attempts to stop further construction have strained economic growth and resulted in stimulus spending on infrastructure, with falling utility. It doesn't help that fake statistics from the municipal and provincial levels exaggerate births, economic growth and maintain migration expectations despite the prior ones having failed due to miscounting births a decade or two  before, and smaller numbers leaving their rural lives permanently (many go to the megacities to work and live in dormitory conditions to send money home, where they return when local employment or farm productivity grow sufficiently to make a living, or come back to retire). By some statistical checks, the birth statistics errors are growing as reported births are 2 million above the number of school enrollments 5 years later, up from 1 million earlier in the decade. IIRC. . 

The growing scale of the overbuilding or premature construction is resulting in a 70% share of unpaid interest refinancing in new lending. Meaning that essentially the whole of the China banking portfolio is non-performing to some extent. There are only a few years left where net savings inflows from China's boomers can cover the missing interest payments. At some point enough of them will be drawing on their savings in retirement so that the banking system becomes cash flow negative and has to be restructured. .. 

I really like what you write, cause it is researched, you have many valid observations.

What is strange to me is that after coherent argumentation, in the middle or towards the end of each of your comments, you start generalizations, always the same type of generalizations, how it will all lead to collapse.

I always know how your comment would end: doom and gloom and despair. Maybe I also have some bias, towards positive, but I am trying to fight this tendency.

The above is the same.

- I agree Chinese urban residential real estate market is still too hot (I do not know much about China, but especially about Chinese real estate, I have to admit it).

- I agree Chinese are keeping their wealth  in real estate and in bank deposits, very small amount also in stocks, bonds, physical gold, art etc. Credit Suisse 2019 wealth report claims that Chinese wealth is 50% financial and 50% real (about 65 trillion USD in total), but I think your claim 80% real (estate) is more sound than theirs, truth is somewhere between.

I will explain:

Stock of urban real estate in China 2019: about 30 billion sqm. Property loans are relatively small in value PBOC data:  45 trillion yuan and most of them are personal mortgages 30 trillion yuan = 4.5 trillion USD. The rest 15 trillion are different types of property loans: government cheap housing, developers  (maybe a lot is missing an eye here if they finance through HK, but how much they really could be 1 trillion USD ? not more otherwise it would be all over the news).

Credit Suisse values these 30 billion sqm at 1,000 USD per sqm, probably should much higher at 2000 or even 3000 USD / sqm - the prices in Tier 3 cities.

So real estate is more like 60 to 90 trillion USD not 30 trillion USD as per CS.

Financial wealth is what it is in CS report: about 30 trillion USD net of liabilities.

So it is 70/30 real estate/financial wealth in China 2019.

- I do not know what to think about 65 million vacant units: They are investment by Chinese that are diversifying out of bank deposits, nowhere else can Chinese put their money, stock market very small, China is not another one US NYSE casino country. The property financing rules ar very strict in China and they are still tightening them. There is no significant risk of insolvancy, low mortgage values. So I think these vacant properties can have good stabilizing effect on Chinese hot real estate market. It created cheap rental market alternative.

 

 

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On 1/23/2020 at 10:07 AM, 0R0 said:

https://asia.nikkei.com/Spotlight/Cover-Story/China-s-housing-glut-casts-pall-over-the-economy

https://www.bloomberg.com/news/articles/2017-03-23/the-controversial-chinese-economist-uncovering-tough-truths

https://www.scmp.com/comment/insight-opinion/article/2187551/chinas-commercial-property-market-thriving-even-residential It seems that China's retail sector is being Amazon'd. That is the only reason one would see retail properties vacant while warehouses are filling up. 

Prof. Gan's team at Chengdu should be doing another survey soon so we can get up to date numbers. I was expecting one to complete last year, but have not seen data yet. 

Data are also collected for Moody's and CBRE 

1.I suggest you look up Kyle Bass' presentations on the subject of China real estate and the state of banking. He has quite the argument to make. 

2. Your expectation of a planned economy mixed with a wild West private sector producing consistently good decisions is more deserving of the 95% probability of error. Your position appears to be that reading official statistics from a communist controlled country is sufficient to obtain a picture of what is going on there. Official stats need to be assessed as to bias and trend of error. It is the official stats that are unsubstantiated. Use private market surveys like Caixin or Markit etc. Or reports from the "truth to power" economists trying to nudge the party towards economically useful decisions and provide statistics that the NBS or its provincial suppliers of data do not want to pass on to the leadership.. 

You are being Naive. Do some homework and get a realistic picture. 

3. China is the biggest credit bubble in history. It is a colossal malinvestment in economic terms. They rushed ahead, building upstream industrial capacity to feed the rapid buildout of infrastructure, housing, retail and office space with no consideration of long term profitability Now that they have built up what they needed, that basic industry is just a useless albatross, with no market for its products. e.g. It produces steel of lower market value on the global market than the  expensive Australian and Brazilian  iron ore it was made of. 

1. Kyle Bass personally (and his hedge fund) lost a lot of money on his Chinese investments. He shorted yuan for 4 years, was burned badly and eventually exited. Once I was listening for 10 minutes of his argumentation (backing these investments, that were already in red then). When I counted 5 big factual inaccuracies  I turned off, to as to not waste my time any longer. I am sorry but he is not Soros and China is not Great Britain.

2. Only stupid people believe in all statistics, whatever the sources of them. But there are some statistics that are more difficult to falsify than others, and these are real indicators of the facts on the ground. GDP growth, especially in countries with significant agriculture and services sectors are easy to be manufactured to some extent. I do not look at it as the major indicator. Number of tertiary education graduates, ridership on high-speed rail, level of wages, mileage of expressways and all other types of infrastructure, US patents granted, retail sales of consumer goods, electricity generation and consumption by sector, foreign spending by Chinese tourists. You cannot make them, it is too difficult.

3. Please show some facts ? How China can be biggest credit bubble, and colossal mainvestment for 20 years (that is the approximate time I read constantly about it in The Economist and other press, or watch at reuters, bloomberg etc.).

It has to be huge. And it is not visible in the official data.

You can hide small mainvestment for a long time of a big malinvestment for a short time, but not both.

Bad loans you can hide but for a limited time, even in India.

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1 hour ago, Marcin2 said:

1. Kyle Bass personally (and his hedge fund) lost a lot of money on his Chinese investments. He shorted yuan for 4 years, was burned badly and eventually exited. Once I was listening for 10 minutes of his argumentation (backing these investments, that were already in red then). When I counted 5 big factual inaccuracies  I turned off, to as to not waste my time any longer. I am sorry but he is not Soros and China is not Great Britain.

2. Only stupid people believe in all statistics, whatever the sources of them. But there are some statistics that are more difficult to falsify than others, and these are real indicators of the facts on the ground. GDP growth, especially in countries with significant agriculture and services sectors are easy to be manufactured to some extent. I do not look at it as the major indicator. Number of tertiary education graduates, ridership on high-speed rail, level of wages, mileage of expressways and all other types of infrastructure, US patents granted, retail sales of consumer goods, electricity generation and consumption by sector, foreign spending by Chinese tourists. You cannot make them, it is too difficult.

3. Please show some facts ? How China can be biggest credit bubble, and colossal mainvestment for 20 years (that is the approximate time I read constantly about it in The Economist and other press, or watch at reuters, bloomberg etc.).

It has to be huge. And it is not visible in the official data.

You can hide small mainvestment for a long time of a big malinvestment for a short time, but not both.

Bad loans you can hide but for a limited time, even in India.

I actually started to listen to Kyle Bass AFTER he dropped his China short position, because he appeared to be blinded by the Chanos argument about housing. Which was incorrect at the time, as people were still flowing in from the country side and the only efficient way to accommodate that scale of migration was to build new cities from scratch well ahead of their arrival. The funding and ownership was private rather than all SOE and provincial/municipal. And the leverage was not yet in skyscraper territory. Demographics were still favorable with more people entering the workforce in the heavy consumption age cohorts than were entering savings for retirement and then retiring. Now things have reversed. 

Kyle Bass' arguments make sense NOW, the demographic swing to contractionary demand has already started. Now that most of the rural population is old and dying (about 12 million a year) there is nobody to come into urban centers. General agriculture labor productivity has stalled some years ago so further migration means less food. If the farm productivity issue is solved then there are perhaps 200 million potential migrants to urbanize at most. That TAM is already fully supplied by existing housing in place, about 70 mil vacant units. 

The Chinese policy had been and remains to flood the markets with enough liquidity and the economy with sufficient infrastructure projects to maintain steady growth, but it is no longer working. The non performing loan problem is growing and has already gotten to the point of interest rollover reaching 70% of new credit issuance. As the regulators are aware of the issues and have their plans to maintain a policy of correcting the prior excesses, NPLs would be liquidated and restructured at a pace that is not destabilizing to the economy and financial system. But that is not working since 2018. Repo disruptions accelerated from single occurrences to a constant stream by end of 2019. As argued by Michael Pettis, the closed government sponsored finance system where banks and SOEs are the same entity on both sides of the balance sheet allows them to manage NPLs "at will". But they can't manage cash flows outside of perpetually monetizing debt as savings cash flows turn negative when people retire. Then the financial system has greater outflows. 

https://carnegieendowment.org/chinafinancialmarkets/78304 is interesting though not focused on the China issues.

he private non-bank or shadow bank system was let loose to invest in SIVs of Muni/Provincial etc. issues. Those allowed shifting credit activity off of bank's books and off the official bond market. This was how the 2016-17 stimulus was funded. ~200% of GDP in credit was added. That funded an excess of real estate that they then fought, as it became obvious that is the case. In 2019 they let loose another round of shadow banking expansion coupled with large infrastructure builds. I don't have up to date numbers on that yet. 

I refer you to Helsinki U's Dr. Malinen  to look at some relevant leverage stats. I posted them elsewhere. And gave a blurb about declining Total Factor Productivity going further into negative territory. 

https://twitter.com/mtmalinen

While I applaud your focus on hard data, I note that you are focused on long term issues like tertiary graduates, and falling marginal utility items like infrastructure. Those are great, but they need to have economic value, which has been declining - more infrastructure etc. results in smaller gains in GDP than prior investment. 

You can see how much of China's public economic persona must be whitewashing as the response to the Wuhan Coronavirus should make clear, it is an endemic issue. 

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3 hours ago, Marcin2 said:

I really like what you write, cause it is researched, you have many valid observations.

What is strange to me is that after coherent argumentation, in the middle or towards the end of each of your comments, you start generalizations, always the same type of generalizations, how it will all lead to collapse.

I always know how your comment would end: doom and gloom and despair. Maybe I also have some bias, towards positive, but I am trying to fight this tendency.

The above is the same.

- I agree Chinese urban residential real estate market is still too hot (I do not know much about China, but especially about Chinese real estate, I have to admit it).

- I agree Chinese are keeping their wealth  in real estate and in bank deposits, very small amount also in stocks, bonds, physical gold, art etc. Credit Suisse 2019 wealth report claims that Chinese wealth is 50% financial and 50% real (about 65 trillion USD in total), but I think your claim 80% real (estate) is more sound than theirs, truth is somewhere between.

 

I will explain:

 

Stock of urban real estate in China 2019: about 30 billion sqm. Property loans are relatively small in value PBOC data:  45 trillion yuan and most of them are personal mortgages 30 trillion yuan = 4.5 trillion USD. The rest 15 trillion are different types of property loans: government cheap housing, developers  (maybe a lot is missing an eye here if they finance through HK, but how much they really could be 1 trillion USD ? not more otherwise it would be all over the news).

 

Credit Suisse values these 30 billion sqm at 1,000 USD per sqm, probably should much higher at 2000 or even 3000 USD / sqm - the prices in Tier 3 cities.

So real estate is more like 60 to 90 trillion USD not 30 trillion USD as per CS.

Financial wealth is what it is in CS report: about 30 trillion USD net of liabilities.

So it is 70/30 real estate/financial wealth in China 2019.

- I do not know what to think about 65 million vacant units: They are investment by Chinese that are diversifying out of bank deposits, nowhere else can Chinese put their money, stock market very small, China is not another one US NYSE casino country. The property financing rules ar very strict in China and they are still tightening them. There is no significant risk of insolvancy, low mortgage values. So I think these vacant properties can have good stabilizing effect on Chinese hot real estate market. It created cheap rental market alternative.

 

 

 

 

I reach conclusions from the data I find and I am aware of.

As to how the Chinese housing finance works, it is only 50% bank loans. There is lots of documentation on the issue in how HK real estate is funded. Same thing happens in China. The inflationary history is why there is such a strong cultural preference for real estate. It is no secret that China's money supply is larger than that of the rest of the industrialized world. That is why Chinese upper classes fear inflation so much. The off the books funding of real estate is via family financing. Young male children and increasingly females as well, get their down payments with the savings of 4 grandparents and 2 parents in a loan arrangement as soon as they have a job and qualify for a mortgage. Today it has shifted to them buying the real estate for the grandkids as soon as they are born, hence the shift to 2nd and 3rd homes being the bulk of sales (2/3). Beyond that, they balance portfolios with real estate to be greater than 50%.

Insurance trust and annuity products in the shadow banking system are producing the funding that used to build private business, but was diverted to SIV investments as well during the stimulus period of 2016-17. The fight against the sector and against excess real estate prices and leverage resulted in shrinking growth in the private business sector and many shutdowns. The attempt to shift private funding to SOE banks fell flat, as they had no clue ho to lend to them. 

I don't really understand why you don't see that China's finances are not magically exempt from economic laws. The Chinese followed a more aggressive version of the Japanese and Korean economic and financing development model. How can they be free of the consequences? Their development was a classic bubble economy and it will crash accordingly, just like the US collapse in 1929, just for different reasons, as they are structured differently than US financing had been then. 

They produced more long term investments in all measures relative to the scale of their economy. They have overshot as do all bubbles, and are trying very hard to keep this from crashing like Iomega stock. Or Japan's real estate and stocks. 

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On 1/14/2020 at 12:13 PM, Marcin2 said:

Additional purchases of 200 billion of US merchandice and services by China will allow to blunt the spire of US technology war.

How we can buy 200 billion of merchandice if you embargo purchases of so many products by Selected Chinese companies or Simply by China ?

Even if China buys additional 50 billion of products it really can source from US on market terms cause there is demand, and another 50 billion just to please Trump and US public, it still gets cheap. Assume China looses 25 billion on these additional 50 , half the price, it still means tech war has 2 billion per month cost, like nothing.

 

Quit worrying about how to buy 200 billion worth of goods per year because there is another 166 billion coming behind it. That will be much tougher.

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