Chinese housing bubble

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There's a real estate bubble building in Australia. I think it has to do with the ability to write off mortgage payments from your income. Many people whom I know have leveraged to the max to buy properties and are renting them out. I am afraid it's going to end badly for them.


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My feeling with the Chinese is that their government is basically allowing the free flow of credit to its people for anything and everything (like buying property in foreign countries). The government has financed massive cities to be built (see the "mini Manhattan" they created) in an attempt to draw people from rural areas into the city. They are attempting to create a society that has historically been thrifty to one that is consumer driven. They are attempting to emulate the west and encourage consumerism. Unfortunately it's difficult to change a culture overnight and the current market manipulation, currency manipulation and vast fraud seen in China isn't going to last long.
 
China is screwed for many reasons, only one of which is individuals' debt.

Provincial debt is bonkers
One child policy
Communist government
Culture of conformity
A billion people living in mud hut poverty
Their cheap labor is being undercut by southeast Asian countries
Nationwide environmental catastrophes are just picking up steam
Inability to project military power more than about 80 yards off their coast
Best Korea doing the things Best Korea does

Envy of China's place in the world, now or in our kids' lifetimes, is misplaced.
 
pgg said:
China is screwed for many reasons, only one of which is individuals' debt.

Provincial debt is bonkers
One child policy
Communist government
Culture of conformity
A billion people living in mud hut poverty
Their cheap labor is being undercut by southeast Asian countries
Nationwide environmental catastrophes are just picking up steam
Inability to project military power more than about 80 yards off their coast
Best Korea doing the things Best Korea does

Envy of China's place in the world, now or in our kids' lifetimes, is misplaced.
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I'd love to hear more about this (Chinese naval power or strength) if you ever have the time for it @pgg, especially since you're in the Navy and so have more insight on this than a civilian like me ever would.

For example, I've heard China is trying to build a huge modern navy, using it to encroach in the South China Sea, and even building artificial "islands" there. But I suppose China only looks militarily strong in the South China Sea because it's relative to the other nations there (e.g., Phillippines, Viet nam), which don't have much of a navy at all?

Down here in Australia we hear a lot about China. Apparently lots of Australia's economy is tied to China, but obviously politically and culturally Australia is much closer to the US. Australia could be in a bad spot if geopolitics ever change for the worse between the US and China, but I assume Australia would go with the US if that ever happened.
 
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bashwell said:
Just on a related topic, there are lots of Chinese buying real estate in Sydney, Australia (and other places in Australia). I have no idea if it's actually true (fact checkers!), but many Australians assume that's why the average price of a house in Sydney is just under $1 million (AU). Canadian friends tell me it's happening in some parts of Canada too.
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I has been declared illegal for foreigners to own real estate in Australia to stop all the Chinese from biding the prices beyond reason. The game is over. Vauncouver placed a 15% transfer tax for foreigners for the same reason. New York is now asking for the names of the owners of all the shell companies that buy real estate with the purpose of hiding money from taxation in their home countries.

http://www.domain.com.au/news/are-y...ia-what-you-now-need-to-know-20151201-glck5c/
 
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urge said:
I has been declared illegal for foreigners to own real estate in Australia to stop all the Chinese from biding the prices beyong reason. The game is over. Vauncouver placed a 15% transfer tax for foreigners for the same reason. New York is now asking for the names of the owners of all the shell companies that buy real estate with the purpose of hiding money from taxation in their home countries.

http://www.domain.com.au/news/are-y...ia-what-you-now-need-to-know-20151201-glck5c/
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I'm not sure what to believe, I just found this on an Australian government website:
Foreign Investment Review Board approval

If you are a foreign resident you cannot buy an established residential dwelling in Australia, either directly in your name or through a trust relationship or company structure. Penalties apply for breaching this rule.

You can buy other types of Australian residential property, such as new dwellings, vacant land and property that is to be redeveloped, but you must first get approval from the Foreign Investment Review Board.

If you are a temporary resident you can buy an established dwelling if you use it as your residence in Australia and get approval from the Foreign Investment Review Board.

http://www.ato.gov.au/Individuals/I...n-Australia/Owning-real-property-in-Australia
Click to expand...
 
bashwell said:
I'm not sure what to believe, I just found this on an Australian government website:
Click to expand...
What is it you don't believe?

They don't want foreign investors buying property left and right.

Did you not know about this? Are you not in Australia?
 
urge said:
What is it you don't believe?

They don't want foreign investors buying property left and right.

Did you not know about this? Are you not in Australia?
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I didn't say I don't believe, but that I don't know what to believe. In other words, I'm not denying anything that's been said, but simply expressing my own uncertainty over what's been said.

But no worries. Obviously the Australian government website is the official source.

I am in Australia, but no I'm afraid I didn't know the details of this beforehand to be honest. That's because I'm not Chinese or another foreigner looking to buy real estate in Australia so this doesn't apply to me, hence there wasn't any pressing need for me to pay any particular attention to this. To be fair, I doubt most Australians know the details either.
 
bashwell said:
I'd love to hear more about this (Chinese naval power or strength) if you ever have the time for it @pgg, especially since you're in the Navy and so have more insight on this than a civilian like me ever would.
Click to expand...

Being in the medical corps hardly makes me any kind of authority.

Projection of military power over great distances is fantastically expensive and logistically very complex. The only reason the US can do it is because we a) can make use of 100s of foreign bases in dozens of countries, which have massive logistic trains associated with them, and b) carrier air groups. And it costs us many hundreds of billions of $ every year, which is far far more than China is spending, even at their recently accelerated rate.

China did buy a non-nuclear semi-defunct carrier from Russia and have rehabilitated it to use as a training tool, but it'll never sail far from China. It has a ramp for launching fixed wing aircraft. They have reasonably capable aircraft (modified Russian Sukoi somethings IIRC) but the primitive launch system limits their takeoff weight (i.e. range and payload). They haven't ever built a modern carrier and their first iteration isn't going to be especially competitive.

Or safe. Carriers are big vulnerable attractive targets and rely on the rest of the group to defend them. Antiship missiles are fast, cheap, and effective. Submarines are dangerous. China doesn't have any of the other pieces to support, protect, and supply a carrier.

But those aren't even the biggest problems. We've been sending carrier air groups all over the world since WWII, and we've gotten good at it. But it took us decades to figure it out. China has essentially zero experience with naval aviation. The hard part of it isn't the technological quality of ships or the aircraft or the fleet around the carrier, it's all of the integrated systems, and systems of of systems, the doctrine, joint operations, the personnel and their training and leadership.

China could get its navy there, eventually, if they spent like we did and paid the blood price of lost aircraft and dead pilots, but given how impoverished the vast majority of their country is, their looming demographic catastrophe, and all the other problems they have, catching up in the conventional force projection arena is probably out of reach for a couple decades at least, until he generation being born now comes of age.

And in any case I think they really have few ambitions in that direction. They've established exactly one military base abroad (in Djibouti) and it appears most of their efforts have focused upon becoming a regional power, to do things like assert their economic hold on the South China Sea. They're throwing money at buying influence and resources abroad, especially in Africa and South America, but that's a different kind of power.

Where they have made strides and are catching up is in space and especially cyber warfare. But neither of those will take Taiwan or land troops in the Persian Gulf.
 
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pgg said:
Being in the medical corps hardly makes me any kind of authority.

Projection of military power over great distances is fantastically expensive and logistically very complex. The only reason the US can do it is because we a) can make use of 100s of foreign bases in dozens of countries, which have massive logistic trains associated with them, and b) carrier air groups. And it costs us many hundreds of billions of $ every year, which is far far more than China is spending, even at their recently accelerated rate.

China did buy a non-nuclear semi-defunct carrier from Russia and have rehabilitated it to use as a training tool, but it'll never sail far from China. It has a ramp for launching fixed wing aircraft. They have reasonably capable aircraft (modified Russian Sukoi somethings IIRC) but the primitive launch system limits their takeoff weight (i.e. range and payload). They haven't ever built a modern carrier and their first iteration isn't going to be especially competitive.

Or safe. Carriers are big vulnerable attractive targets and rely on the rest of the group to defend them. Antiship missiles are fast, cheap, and effective. Submarines are dangerous. China doesn't have any of the other pieces to support, protect, and supply a carrier.

But those aren't even the biggest problems. We've been sending carrier air groups all over the world since WWII, and we've gotten good at it. But it took us decades to figure it out. China has essentially zero experience with naval aviation. The hard part of it isn't the technological quality of ships or the aircraft or the fleet around the carrier, it's all of the integrated systems, and systems of of systems, the doctrine, joint operations, the personnel and their training and leadership.

China could get its navy there, eventually, if they spent like we did and paid the blood price of lost aircraft and dead pilots, but given how impoverished the vast majority of their country is, their looming demographic catastrophe, and all the other problems they have, catching up in the conventional force projection arena is probably out of reach for a couple decades at least, until he generation being born now comes of age.

And in any case I think they really have few ambitions in that direction. They've established exactly one military base abroad (in Djibouti) and it appears most of their efforts have focused upon becoming a regional power, to do things like assert their economic hold on the South China Sea. They're throwing money at buying influence and resources abroad, especially in Africa and South America, but that's a different kind of power.

Where they have made strides and are catching up is in space and especially cyber warfare. But neither of those will take Taiwan or land troops in the Persian Gulf.
Click to expand...
That was extremely interesting to say the very least, especially since China seems like such a big player in or near Australasia or Oceania where I am. It helps me put things in some perspective at least, so this was just what I was looking for, thanks @pgg!! :)
 
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