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Surging homeowner loans in China raise alarms over debt

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KnowB,

Good post, also toss in NZ & Australia housing markets being driven up out of sight! Pretty sure same happening in the UK & Europe too

Its only a Chinese problem as No foreign country owns any of the debt.

DocC,

Yes & no, I have often said for years now China is a firecracker already lite, implode, explode or both, time will tell. I think the problem is so huge & so fast it will make Japans 80s bubble pop look tiny.

And YES it will for sure affect housing markets worldwide where Chinese are buying anything & everything to just keep their $$$ OUT of China at any cost

We can only wait & see. One thing you have to remember is Chinese people WONT just sit & take it when they get burnt/abused, they REALLY protest, THEN we will likely see what the Peoples Armed forces are REALLY for!!

Hope I am wrong

0 ( +0 / -0 )

China refuses to take part of the World currency market and sets their own rate and it does not change with the markets.

So that's why their economy is relatively stable while the world's economy is sluggish

Capitalism is a mean player and greed and excess will bring you down hard.

Perfect example of USA and Japan

Always remember what they say is not really the truth but the truth they want you to believe.

It seems you are very familiar with them. how long have you do business with them?

And if you still argue they are not forthcoming they then get Hostile in rhetoric and insults they have taken as its your fault for not agreeing with them

Well, I doubt whether they would care if I believe in them or not, unless I am an important government official who has a particular interest with them. Besides, all countries and all governments is lying in one way or another, including the Japanese government.

0 ( +0 / -0 )

FizzBit: I thought the Chinese never really own the homes the buy. Did something change?

Last I heard it's more like a 50-year or 100-year right-to-occupy-or-re-lease that that homeowners buy from the government (don't remember the exact number of years). Not sure if anyone knows what will happen when the rights expire.

Maybe that partially explains the outflow of real estate funds to other countries (in addition to speculation). They're not getting house loans in the foreign countries but paying cash. Visited a nice Italianate villa in La Jolla once, sold for cash by an ex-exec of a defunct USA startup to an exec from China (of a tourism company?), family moved in on investment visa, I think. Large pool like the Beverly Hillbillies, but house was unfinished, plastering still in progress.

0 ( +0 / -0 )

Its only a Chinese problem as No foreign country owns any of the debt. Only Chinese run state banks hold the loans. So if they fail only China loses. China refuses to take part of the World currency market and sets their own rate and it does not change with the markets. Its a good thing that they hold the debt and only they hurt themselves. Who cares! Capitalism is a mean player and greed and excess will bring you down hard. But we will never know as the Chinese do not let the real situation be known. Always remember what they say is not really the truth but the truth they want you to believe. And if you still argue they are not forthcoming they then get Hostile in rhetoric and insults they have taken as its your fault for not agreeing with them and believe all is well where its worse than we really know.

0 ( +0 / -0 )

I thought the Chinese never really own the homes the buy. Did something change?

0 ( +0 / -0 )

KnowBetter Wonderful post. These Chinese investors need to be here in Japan.Huge potential.Will good for Japanese real estate.

-1 ( +1 / -2 )

In JP who has the depth! Or is it de....

0 ( +1 / -1 )

as families still save twice as much as they borrow, with some 58 trillion yuan in household deposits

Then nothing to worry about

But Collier said that credit-fuelled spending was a “risky game”

All economic system has it's own risks

China's banks are state owned, reducing the risk considerably. The other factor is regulation. Well regulated transparent sectors normally have little to worry about.

Just about to say it.

0 ( +2 / -2 )

So it does not belong to the deve-loving world any more. Whats the news?

0 ( +1 / -1 )

bubble. will end like Japan did with lost decades ahead. P:lus they have the same demographic challenge in the medium term.

3 ( +3 / -0 )

house of cards expertly built and balanced is beautiful to behold, but falls real fast,,,

1 ( +1 / -0 )

you should have been aborted you #unt

0 ( +0 / -0 )

People only become rich when they sell those homes, unless they take out loans against the loans because they want to feel rich without being rich. I like that as they come to Japan and spend a lot of money. They are very polite and quiet too.

-6 ( +0 / -6 )

JeffLee: ... China's banks are state owned ... Well regulated transparent sectors normally have little to worry about. ...

I'm remembering something from several years ago, when China claimed a huge growth rate, and some were claiming that such rate was not supported by factors that could be observed externally, such as things like electricity consumption, coal consumption (coal was piling up at facilities), maybe some other things.

4 ( +5 / -1 )

Fortunately, China's banks are state owned, reducing the risk considerably. The other factor is regulation. Well regulated transparent sectors normally have little to worry about.

China has so far managed soft landings from big debt problems, and avoided US-Japan style meltdowns, thanks to its strong state control.

1 ( +5 / -4 )

China every day is getting closer to an internal financial meltdown that the rest of the world saw back in 2008 except that with over a billion people in that one country, it will have an effect on the rest of the world. China has been driving up real estate prices in major cities around the world as Chinese flee China with their money which is creating a financial vacuum in China while creating real estate bubbles that are forcing ordinary citizens in those cities they are 'invading' to lose their homes when they can no longer afford to pay the taxes on the increased assessment of their homes with their fixed income now that they have retired. First time buyers and young families are being forced out of the cities they have lived in all their lives because the can't afford to buy or rent due to those Chinese buying up everything in sight as if they were a swarm of locusts descending upon farmers' fields and stripping them of everything. That in turn has created another problem for businesses now because they can't find people to work those mid to lower end paying jobs because no one can afford to live in the area or wants to commute to that area. Some cities have started to tax the 'problem' but then the Chinese claim it's racist to do so even though the tax is aimed at ALL foreigners or those that leave the homes empty and don't rent them out. It just so happens that the majority are Chinese that are buying homes and leaving them empty which in turn drives up property values and forces out locals that live and work there. The ghost towns that Chinese have created in China are now affecting cities like Vancouver, Burnaby, Richmond, Surrey, New Westminster, Coquitlam, and Toronto in Canada where you find some buildings are sold out completely but they are only 30 to 60% occupied.

5 ( +7 / -2 )

Chinese have informal loans from their clans which does not appear in those figures.When the bubble goes PRC will implode and explode at the same time.

2 ( +2 / -0 )

Only right that Chinese households should join the global debt party. The problem is the champagne was prosecco, even the happoshu is running out and the hangover will be the mother of them all in the morning.

3 ( +3 / -0 )

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