We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
|
Samizdata quote of the day Beijing is full of empty shopping malls and empty apartment buildings. There are at least 60 million empty housing units in China, and probably a great many more than that. The absurd construction boom that continues to go on here is many times bigger than the rest of the world combined, and the Chinese banks are many times more bankrupt than those anywhere else
– Michael Jennings (currently in Beijing)
|
Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
|
Oh shit!
I recall that during the banking collapse in Japan and Korea in the ’90s reading from a few commentators that if it ever came to light what was going on in China…
Now I’m not an economist. I largely do the funnies over at Counting Cats but I do wonder if (when?) the Chinese wheel comes off (says Nick who’s wife recently bought a Lenovo IdeaPad) how will that hang with the way the Chinese have gamed the Renmimbi (or whatever it’s called)? I mean they artificially peg it to the US$ to keep their exports cheap.
Not that I wish to sound like Fraser from Dad’s Army (or indeed like the depressingly accurate Paul Marks) but I think it’s getting close to time to bag the last of the V8 Interceptors.
But does it matter in a dictatorship? In a democracy with rule of law, yes, all that mis-allocation of resources would cause a huge slump eventually, and have knock-on effects in other countries. But in China, rule of law means little. Lets say Bank A is massively over extended, lent loads of money to build empty shopping malls. The State could just close it down. Wipe out the debts, as if they never existed. Yes people will lose money, but what are they going to do – sue the Communist Party of China? The Chinese can manage these things far ‘better’ than we could, precisely because they have no respect for law, or human rights. Unless they get so heavy handed that they provoke another violent revolution then they will be able to sort it out, one way or another.
And all this building is for whom?
Quite obviously not for the Chinese themselves.. perhaps they are building the necessary accommodation for all the Marxists/Maoists that will be leaving the EU & USA when it all falls apart.
The problem is that the Chinese Communists are a small and shrinking part of the population of China. The Chinese peasantry have only to stand up and shake themselves like a dog shaking water off its back and they would be gone.
The problem is that they don’t do this, having been effectively programmed to support the government, but such forms of programming often break down under the stresses and strains of economic turmoil.
Equally, it should be remembered that the geographical boundaries that describe the modern Chinese state include many people who are not and indeed have never been under Chinese dominion prior to Mao. They would use any opportunity to free themselves from Chinese tyranny.
The Chinese communists might seem all prevailing, but they are too few in number and their modern China is a house built on sand. A good hard shove would cause complete collapse.
Time to push…
China is one of the world’s largest trading nations. If China has a crash, we all feel it, hard. That can’t be avoided. The western economies are bad enough already. This can only make it worse.
And China contains perhaps 1.3 or 1.4 billion people. If the Chinese economy crashes, they suffer. Mostly, these are ordinary people trying to earn a living and look after their families. If they suffer due to a crash, that’s not a small thing.
China isn’t internally very stable. Massive levels of inequality, no safety valves like democracy, civil society and the rule of law. The history is that insurrection, unrest, and revolution have happened from time to time.
As well as building far too many flats and houses, China has been militarising. In many ways their military is less sophisticated than ours, but there is lots of it. Lots of nukes, and a fair few missiles. Combine that with civil unrest and insurrection, and there is plenty to worry about.
On the other hand, South Korea had an economic crisis in 1987, and the authoritarian regime stepped aside and the country got democracy followed by restructuring and a strong economic recovery.
There are lots of possibilites, but the bad ones are bad, and should be worried about.
“The problem is that they don’t do this, having been effectively programmed to support the government, but such forms of programming often break down under the stresses and strains of economic turmoil.”
But, of course, we in the West are so much more sophisticated, and realize that we can shake off our masters any time we choose. Oh, wait . . .
Some pictures to illustrate the words.
I have no doubt that there is no excess of flats relative to demand at a price which X no of Chinese ‘peasants’ could pay. Of course, the problem is that there will be a surplus of flats at the price required for the building projects to break even. The Chinese government could ‘solve’ the problem by buying the flats off the private owners and auctioning them off at whatever price they fetch. They could either raise the money in international bond markets, or they could de-peg their currency and print the money. (By the way, the thing about the Chinese ‘manipulating’ the currency is nonsense. I’m not so sure I would buy US treasuries at such a high price though). Then the cost of the readjustment gets spread across renminbi users through the usual inflation mechanism.
Laird- much LESS likely I would say, as we have the illusion of democracy to keep us busy. After all, we can always vote them out if we don’t like them…
When the Chinese bubble bursts, it will be with a loud and very bloody bang.
And, of course, it will come as a complete surprise to all those who are supposed to be monitoring and analyzing the situation in China, just as all of the sudden authoritarian collapses around the world over the last several decades have.
The “chinese miracle” is a fraudulent, corrupt castle built on a sand dune on the edge of a cliff—when the slide starts, there won’t be any way to stop it, or the civil turmoil which will certainly follow.
It’s going to be very interesting watching the string of collectivist dictatorships in Asia, Latin America, and the Middle East pop off like big and little firecrackers over the next few years.
The desire for freedom and individual dignity and autonomy is universal, even if some of the variations are difficult for us to understand. The people living under these incompetent “Duces” know exactly how stupid and corrupt their ruling elites are. Once they realize it is possible to get rid of them, it will be only a matter of time.
In this age of global communications, it’s just like Mr Universe says—“You can’t stop the signal.”
Well if that proves to be true, all I can say is bring on the collapse, the sooner the better!
Some of the properties will be salvaged in fire sales. Others will go the way of Detroit and be scavanged, and yet others will be permitted to return to nature, an archeological monument to wildly inappropriate economic signals.
The Australian segment referred to above is instructive. The poor fellow getting impoverished by the government’s exchange policy and held out of the housing market by the government’s housing price supports complains that if only the government would intervene… That’s the worst part of the crisis, that many people will take this artificially manipulated, government dominated situation as “the free market”.
wh00ps, google “sarcasm” sometime.
It is (or was, until recently) conventional wisdom for the working and lower middle class that owning real estate was a prudent way to save, and the safest path to middle class (along with educating one’s children). China has not yet really been burned by the housing collapse, and the masses only learn such lessons the painful way. However…
That is the rub – this huge housing stock is not for consumption; it’s savings, and long-term savings at that. The Chinese believe that an apartment (by far the most common kind of real estate ownership in China) declines in value greatly if it has been lived in even for a day – thus the majority of these apartments are not to live in, but to sell at some point to fund retirement. Change comes slowly to the Chinese psyche – people will not realize how much of their saving have evaporated until they begin selling en masse, and the en masse part may not come for quite a few years. The Chinese society is aging, but has not yet “grown old before becoming wealthy”. One can read in the newspapers about real estate prices declining, but the truth is not truly driven home until you or someone close sells a house for 1/2 of what they paid a decade or two ago. Even that “1/2” may be optimistic, given that the quality of the new construction there is terrible.
To recap, I agree that a massive collapse with all the perks will come, but not soon – IMHO, it’ll be at least a decade. China will be brought down by its demographics, unless the US goes up in flames before that, which I doubt.
One could do a Prisoner Redux in one of these ghost cities.
“Where am I?”
“In The City…”
:
:
“Hu is number one?”
“Correct”
“Err…”
There is always some misallocation of resources. it all depends on how the losses are handled. i expect we might see some hiding, socialising, escaping abroad, even. Much will depend on who’s fingers got burned and if others can be held or seen to be held accountable.
Still, 60m houses. Who says there is a housing crisis?
@Tim Laughing my t%ts off!
hmmm… and how many people who say the Chinese have “no respect for law or human rights” have actually spent time in China?
Usually when Westerners say this what they really mean is the Chinese have no respect for “our law”. And of course the West has to be right doesn’t it because we spent centuries slaughtering “ignorant savages” to make sure they understood our laws and way of life was the correct one.
China these days is about as communist as North America. The Chinese as a people, and their government actually have a lot of respect for law and human rights. Don’t believe everything you get force fed by Western media.
hmmm… and how many people who say the Chinese have “no respect for law or human rights” have actually spent time in China?
Usually when Westerners say this what they really mean is the Chinese have no respect for “our law”. And of course the West has to be right doesn’t it because we spent centuries slaughtering “ignorant savages” to make sure they understood our laws and way of life was the correct one.
China these days is about as communist as North America. The Chinese as a people, and their government actually have a lot of respect for law and human rights. Don’t believe everything you get force fed by Western media.
Chinese manufacturing strength is real – I spent many years guarding warehouses and distribution sites (hard not to notice where the good come from).
This manufacturing strength is based upon low taxes (by the standards of the modern West – not by the standards of the West when it was a rising civilization), little regulation (at least of domestically owned producers) and an ununionized workforce. This private property based economy must have Mao (the largest scale mass murderer in history) spinning as he burns in Hell.
However…….
It is claimed (no one really knows for sure) that the Chinese government maintains its low (rigged) exchange rate to the Dollar by producing money as Dollars are presented for exchange. Thus linking itself to the Federal Reserve.
Now if the United States (like Britain and …..) is a credit bubble economy – and it certainly is (even more so than it was in 2008)….
What does that make China?
Hence the observations of Michael Jennings?