business

Asian shares slide as Chinese growth data disappoints

10 Comments
By ELAINE KURTENBACH

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10 Comments
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Buying tons of yen. Should be at ¥125 to the dollar.

-3 ( +2 / -5 )

China peaked and is now on the way down. Exactly what the CCP deserve for its continued wrong thinking and bullying behavior. No tears for the CCP.

6 ( +7 / -1 )

Buying tons of yen. Should be at ¥125 to the dollar.

Unless you are trying to lose money, that makes no sense.

1 ( +2 / -1 )

The property sector is the one sector where the vast majority of savings can be invested in China to realize actual returns (the stock market is comparatively small when realizing that real estate accounts for 30% of TOTAL Chinese economic activity). Unfortunately, just as with China's recent "green shift" policy (and subsequent power outages in ever-colder conditions), we're once again seeing neat-sounding policy implemented with good intentions actually leading to results where more, not less, damage can take place.

The Chinese government implemented in August 2020 what it calls it's "Three Red Lines" (not "Arrows", haha) concerning property development companies, which are: Liability to asset ratio cannot be more than 70% (excl. advanced receipts), Net debt ratio cannot be more than 100%, and Cash to short-term debt ratio cannot be less than 1.

What is the results of these rather severe official clampdowns on what property companies could do with debt? It's pushed ever greater amounts of secret new debt under the carpet, away from regulators' prying eyes. It's also much more difficult to offset old debt with new ones now. Thus, when things go south for these companies, they can't go the government for help since they hid their problems from that very government until it was too late!

When the property bubble bursts, it's going to be crazy. Nobody knows the true amount of debt turning sour, not even the government, while the system relies on property prices to keep rising for the entire system to continue to be viable!

By way of comparison, according to Nikkei, at the height of the "Japanese Property Bubble", average property prices in Tokyo and Kyoto cost a "mere" 18 years total average salary equivalent to purchase. Right now, in Shenzhen, it takes Chinese 56 years of average wages to purchase an average costing house; Beijing takes 54 years' worth, while Shanghai and Guangzhou cost well over 40 years' worth to do so. Yeah...sustainable.

2 ( +3 / -1 )

China is slowing down faster than expected - this low downturn is not expected until next quarter, but here it is

Some factors include having to cut down factory production due to Covid-related problems

And another is the ticking time-bomb that is the huge debts of big real estate companies like Evergrande. They're already starting to default on their debt interests, and China isn't going to bail them out like Lehman Brothers and trigger another Asian Financial Crisis

Seems China is heading into the downturn of the economic cycle

1 ( +1 / -0 )

Kinda bad news.

I hope China recovers.

1 ( +1 / -0 )

Who knows what the real growth is? Every country fudges numbers of GDP and unemployment.

"Markets Panic as China Growth Reported Less Than 28% Quarter-on-Quarter!!"

0 ( +0 / -0 )

I can't wait for the day that Yen/USD will become 10000 yen for 1 USD.

-2 ( +1 / -3 )

Tokyo's Nikkei 225 index gave up 0.2% to 29,025.46.

Huh? The Nikkei ended 1.7% higher on Monday. AP is maybe not the best source of financial news.

0 ( +1 / -1 )

With the Chinese population now starting to decline real estate and construction are not going to be growth industries driving the Chinese economy as they have in the past. China has some 30-40 million housing units j sitting empty in their "Ghose Cities". Their population isn't going to grow and fill these. There is a surplus of housing. What the CCP has to be concerned with is that over half of new housing units are "pre-sold", meaning the new owners paid for them before construction is completed. If the developers run out of money to complete them, a very real possibility, who is going to pay to have them completed? Another sharp knife for Baby Ping Ping to add to his juggling act.

0 ( +1 / -1 )

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