Is China entering Japan's nightmare ? or already ?

[Astroboy]

Shanghai has already plunged 60 percent from its peak of last year.
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I thought that China was good at following Japan's path, but may be too loyal to Japanese nightmare.

GOOD LUCK.

 

[hideway]

What's up with all the nightmares?

 

[Dogen Z]

What's up with all the nightmares?

I wonder, too. It's beginning to sound like those Friday the 13th movies.
China's real economy is still growing despite the drastic drop of the Shanghai market. Japan's bubble economy was based on speculation alone after the real economy stalled.
Speaking of speculation, oil prices are continuing downward despite some potential supply problems. Ergo, the oil price spike was due to nothing more than speculation--but has caused the whole world to suffer. IMO, some people should be taken out to back and shot.

 

[Astroboy]

What's up with all the nightmares?

My point is ..... clear.

Why others are following Japan's path to the nightmare?

Japan's nightmare was caused by big property bubble burst. It is the same as US, UK and others house price crush.

Until last year, all famous economists of the West told that the Japanese case was "ONLY Japan" and nothing to do with Japanese case.

But the reality is not look like, but worse than the Japanese case.

 

[yaoyuting123]

we all need optimistic and be strong when met problems

maybe the momentum of economic developmeng is not good at present .but that is true .china's economy is still increasing rapidly! At the same time .other countries and whole world will handle this problem very well. all we need is calm and intelligence.and if you got time look this nice web in my profile.thank you !If you like to be my friends add me in my profile with msn or yahoo.you can look our web too.

 

[grapefruit]

Japan's nightmare was caused by big property bubble burst. It is the same as US, UK and others house price crush.
Until last year, all famous economists of the West told that the Japanese case was "ONLY Japan" and nothing to do with Japanese case.
But the reality is not look like, but worse than the Japanese case.

It is quite amusing. It is a shame that the world did not heed the lesson learned by Japan.

 

[GodEmperorLeto]

It's not a lesson, so much as it is mass markets and mentalities. These things are so complex it is difficult to pin them down on one singular cause. And hindsight is 20/20. The US housing bubble burst because of a multitude of factors, stemming back to Clinton's initiative where "everyone should own a house" back in the mid-1990s, and culminating with the bad loans that banks started giving out. The gave these loans out en masse, which is the problem. Backed by the government, it doesn't seem that bad to give one risky loan, but the multitudes of bad loans is where it is reaching a high point. Loans are given based on analysis utilizing very specific rubrics, and these rubrics cannot necessarily take into account the uncertainties of the future economy.

The same goes for the investments in China, Japan during it's bubble, and even here in Korea. I'm watching my city (Yangsan) grow by leaps and bounds. Massive investments are being carried out. But a severe economic disaster would be felt monumentally here more than, say, in Seoul or Busan. People would lose their shirts, governments throughout the province would go bankrupt. It would be an enormous mess. But you can't necessarily bank on believing that the economy will go bad. Then you'd never take risks and end up never reaping any rewards. You just have to take wise risks.

 

[Gackt21]

It's not a lesson, so much as it is mass markets and mentalities. These things are so complex it is difficult to pin them down on one singular cause. And hindsight is 20/20. The US housing bubble burst because of a multitude of factors, stemming back to Clinton's initiative where "everyone should own a house" back in the mid-1990s, and culminating with the bad loans that banks started giving out. The gave these loans out en masse, which is the problem. Backed by the government, it doesn't seem that bad to give one risky loan, but the multitudes of bad loans is where it is reaching a high point. Loans are given based on analysis utilizing very specific rubrics, and these rubrics cannot necessarily take into account the uncertainties of the future economy.
The same goes for the investments in China, Japan during it's bubble, and even here in Korea. I'm watching my city (Yangsan) grow by leaps and bounds. Massive investments are being carried out. But a severe economic disaster would be felt monumentally here more than, say, in Seoul or Busan. People would lose their shirts, governments throughout the province would go bankrupt. It would be an enormous mess. But you can't necessarily bank on believing that the economy will go bad. Then you'd never take risks and end up never reaping any rewards. You just have to take wise risks.

This is very true. The only difference in China is that it is still communist and the government control everything. The United States and the rest of the world going suppose to be going on a Captialist market, which is a free market way of doing things. The only problem now are those loans that the government has forced banks to give to people who really can't afford homes in the first place. Then the government decided to bail out these banks for the problem the government caused. The United States might be turning socialist if we get a Marxist for a president.

GodEmperorLeto: You did a good job of describing the problem. You must enjoy Economics a lot. I just took it alittle farther to say that politics played a part too.

What's up with all the nightmares?

The problem will only get worse if we don't let the free market pick back up. Sean Hannity had a plan that might have worked, it included the government buying the bad loans and turning those properties into rentals which would give the people time to get the money to buy the house back. What do you think?

 

[Pachipro]

The US housing bubble burst because of a multitude of factors, stemming back to Clinton's initiative where "everyone should own a house" back in the mid-1990s, and culminating with the bad loans that banks started giving out. The gave these loans out en masse, which is the problem. Backed by the government, it doesn't seem that bad to give one risky loan, but the multitudes of bad loans is where it is reaching a high point. Loans are given based on analysis utilizing very specific rubrics, and these rubrics cannot necessarily take into account the uncertainties of the future economy.

I'll try to make this as short as possible.

It's not a matter of politics and one cannot blame it on Clinton, because it is the fault of the Fed and Alan Greenspan and it matters not who was president at the time.

Ever since the US dropped the gold standard for the US dollar in the 70's, the US has been playing "hide the recession" for the past 30 years. First it was the Star Wars initiative during Reagan's administration which kept the economy afloat by building more weapons after, in the Carter administration, interest rates went as high as 19% and the US was in a full blown recession. It was not Carters fault, he was just the dupe in office when the economy collapsed due to the dropping of the gold standard.

When that started to fail after Russia collapsed, it was the Dot.Com boom of the 90's which hid the start of the recession of daddy Bush's term in office. When the dot.com bullsh*t started to go bust, the Fed enticed congress to pass, and the president to sign, the housing bill and mortgages rates and interest rates dropped to historic lows. And anyone who had a pulse would get a mortgage whether they could afford it or not. The point was to fool the world into thinking that the US economy was strong. It was not the president. It was the Fed! It matters not who was the president because a republican would've been forced to sign it also or they would not be in office. No one gets to run for president without the backing and approval of the worlds bankers or I should say bankstas. If one believes in free elections and free candidates in the US one needs to do alot more reading and research on who actually selects these people. Anyway I digress.

The banks in their greed chopped up these mortgages up to 32x and sold the derivatives to foreign countries in the form of Credit Default Swaps(CDS's), Mortgage Backed Securities (MBS's), Asset Backed Securities (ABS's) etc, etc, which no one understood or could explain and housing prices and speculation went through the roof.

When the loanholders started to default when their low "teaser rate" adjustable mortgages started to go up, they couldn't afford the mortgage any longer and just walked away giving the keys to the bank. This put more houses on the market along with the numerous builders building numerous homes in anticipation that the boom would continue, and prices started to decline due to a glut of homes on the market. As more houses were foreclosed upon it led to the bust and the trouble we are in today.

Now that that Turkey has come home to roost and the bubble has burst and the massive derivatives that have been sold around the world are now worth pennies on the dollar, the banks and investment houses are going broke as they bought billions of dollars worth. And siunce each mortgage was chopped up and sold 32x we are looking at huindreds of trillions of dollars lost. Some have even put the figure at 1 quadrillion dollars which is more than the entire worth of the entire planet earth! Iceland is even considering declaring bankruptcy and is the first country to even hint at it.

The blame lies clearly at the feet of the US Federal Reserve System who, as I said above, has been hiding the recession for the past 30 years and at the feet of the major, former, investment banks which are no longer in business thanks to their greed. And now they (The US Fed) are reaching for straws for anything that may work and the US taxpayer, as well as the UK taxpayer, and the European taxpayer is now being forced to pay for these bailouts when simple economics would tell you that they shoud be allowed to fail. Push the reset button and reboot! But no, they want YOU to pay for it for they do not want to lose their own money as they control everything anyway. They want to continue living the high life while you and yours suffer for it. "Let them eat cake!"

As was planned well in advance, they now have the populace of the world so confused and worried about their jobs, investments, retirements, homes, etc, that the average person has no time to even think about how they were swindled and robbed.

It is the greatest transfer of wealth from the working class to the elites in the history of the world and it will only get worse before it gets better and "they" will have their ultimate goal of a One World Government, a One World Banking System, and a One World Judicial System, as well as a One World Military. It is happening before your very eyes and most people do not even understand it is happening or what is hitting them.

The world financial system has changed forever and it will NEVER be the same. All stock markets just may go to zero and, when everyone has lost everything and are broke, they will reset the system and they will be the only ones with all the cash while the average person has nothing and will be forced to work for the "state". Sound familiar? China? the former USSR? Marxism anyone?

CNBC is stating today that Americans have lost 2 trillion dolalrs from their retirement funds in the last 15 months!

I knew it would happen. I just didn't think it would happen this soon. I thought at least another year or two and that the US would be unified first. But, to quote a line from a famous movie, "They'rrrrre heeeeeere!" and "they've" stepped up their pace.

Today, the stock markets of the world are in complete disarray and no one can explain it. I spoke of this over a year ago on various threads about Lehman, Merrill Lynch and American Express, etc and I was derided and called a conspiracy nut, but sadly, it is all coming true.

This is very true. The only difference in China is that it is still communist and the government control everything. The United States and the rest of the world going suppose to be going on a Captialist market, which is a free market way of doing things. The only problem now are those loans that the government has forced banks to give to people who really can't afford homes in the first place. Then the government decided to bail out these banks for the problem the government caused. The United States might be turning socialist if we get a Marxist for a president.

Sadly the governments of the US, UK, and Europe, as of today with their bailouts are stepping up their pace to control everything! After this they will controill the financial markets and they will not give them up. The US, with the demise of the investment houses are no longer a free capitalist country and the same will be for Europe and the UK.

If we are not on the verge of a One World Financial System, et al, why then have the central banks of major industrilalized countries (except for Japan) of the world lower, in unison, their lending rates by 50bps (1/2%)? Hmmmmm.

The only reason why the governments are bailing out these institutions is because, if they delared bankruptcy, their balance sheets would be exposed to public view and the world would understand just how much toxic, worthless debt they actually had and you are getting to pay for it! Happy?


Gold and silver and or their related stocks will be your only safe haven as, unlike stocks, they will never go to zero and only are worth more in tough economic times. Always has been and always will be unless they scheme to find some way to steal that last safe haven of the average working stiff also.

In the end China will be free of this meltdown and the world will soon be turned into the same state run, centrally controlled system that has been so successful in China as even Henry Kissinger, the kingpin maker himself, said that the US should emulate China because so few control so many.

If you ask me, the few could NEVER control the so many (billions) without the many controlling each other!

Welcome to the New World Order!

 

[Gackt21]

Today I read on the news that the US government just took over some to all most all of the bank here. If you need to know more it was found on www.yahoo.com. This is truely a sad day in the USA.

 

[Pachipro]

A very sad day indeed. Banks are only the beginning and the most important. Next will come the auto industries and the airlines and so on down the line until they control everything.

 

[Astroboy]

A bit older article .....

China bad loans may reach total of $900bn
http://www.ft.com/cms/s/0/337447e4-da70-11da-aa09-0000779e2340.html

Chinese bank denounces report saying its bad loan reaching 900 billion US dollars
People's Daily Online -- Chinese bank denounces report saying its bad loan reaching 900 billion US dollars

I don't trust UK Financial Times, but I don't trust Chinese People's Daily either.
But what I believe is .....
China not immune from the US financial crisis
http://eastasiaforum.org/2008/10/06/china-not-immune-from-the-us-financial-crisis/

Personally I believe .... it is too early for China to follow Japan's nightmare.

 

[Astroboy]

Chinese economy growth rate slows

China's economic growth rate has fallen for the third quarter in succession, amid fears that the economy could be heading for a severe downturn.
The National Bureau of Statistics said the economy had grown at a rate of 9% in the three months to September - down from 10.1% over the previous quarter.

Export growth is slowing, and some companies are running into trouble
BBC NEWS | Business | Chinese economy growth rate slows

It cannot be helped as China's economy heavily relies on EXPORTs to USA & EU market. Global credit crunch has been affecting China.
Before China reach certain level of wealth, they may fall into Japan's nightmare as Chinese bubble is about bursting.

Problem is .... IF economic growth gets slower, tons of social problems will come up to the surface in China.

 

[ManchuTaiwanese]

This is very true. The only difference in China is that it is still communist and the government control everything. The United States and the rest of the world going suppose to be going on a Captialist market, which is a free market way of doing things. The only problem now are those loans that the government has forced banks to give to people who really can't afford homes in the first place. Then the government decided to bail out these banks for the problem the government caused. The United States might be turning socialist if we get a Marxist for a president.

Typical rhetorics. China is no less capitalist than the US if you ever been to China. However Chinese government does have very tight controls in Chinese financial system because an unstable national finanical system can easily bankrupt a nation.
And the US is not turning socialist. It's pure rubbish fabricated by the US media. By default, a socialist country or a communist country tends to sack rich people and to spread thier wealth to the poor. But the US government initiated financial rescue plan is doing the exact the opposite. The US government is robbing the poor and the middle class for the rich. That's not Socialist. That's the worst kind of capitalism called enslavement.

 

[ManchuTaiwanese]

It cannot be helped as China's economy heavily relies on EXPORTs to USA & EU market. Global credit crunch has been affecting China.
Before China reach certain level of wealth, they may fall into Japan's nightmare as Chinese bubble is about bursting.
Problem is .... IF economic growth gets slower, tons of social problems will come up to the surface in China.

It's a misconception that Chinese economy heavily depends on export. Yes, export plays a bigger role in "the growth" of Chinese economy. But it's not as big a factor to the entire Chinese economy. It's not a secret that some Japanese conservatives pray for social unrest breaking out in China. They've prayed for the day for a long long time. But sorry it's just not happening. What Japan should worry is not about the rise of China. China will continue to rise. What will really break Japanese economy and national power is that Japan is aging so rapidly. It's turning into a senior society with so little energy in the bag.

 

[Astroboy]

It's a misconception that Chinese economy heavily depends on export. Yes, export plays a bigger role in "the growth" of Chinese economy. But it's not as big a factor to the entire Chinese economy. It's not a secret that some Japanese conservatives pray for social unrest breaking out in China. They've prayed for the day for a long long time. But sorry it's just not happening. What Japan should worry is not about the rise of China. China will continue to rise. What will really break Japanese economy and national power is that Japan is aging so rapidly. It's turning into a senior society with so little energy in the bag.

Time is limited to China before aging population begins. It is likely that China enters into the time of aged society before the country becomes rich.
China's Aging Population Expanding Fast
http://www.globalaging.org/elderrights/world/fast.htm

Protests have been held outside a Chinese toy factory that has been forced to close with the loss of 7,000 jobs.
Thousands of toy companies have collapse in the last year, as falling orders and rising wages take their toll on the industry. Quentin Sommerville reports.
BBC NEWS | Business | China toy turmoil sparks unrest

www.fas.org/sgp/crs/row/RL33416.pdf
China's Hidden Unrest - Committee to Protect Journalists

 

[ManchuTaiwanese]

Time is limited to China before aging population begins. It is likely that China enters into the time of aged society before the country becomes rich.

i won't put too much faith in Western media. We travel to China all the times. We see things with our own eyes. And public protests are quite common in China these days. But it's not like China is going to collaspe tomorrow. I don't see manland China will have too much of problems in the coming decades.

 

[Astroboy]

i won't put too much faith in Western media. We travel to China all the times. We see things with our own eyes. And public protests are quite common in China these days. But it's not like China is going to collaspe tomorrow. I don't see manland China will have too much of problems in the coming decades.

True .... not tomorrow.

 

[ManchuTaiwanese]

True .... not tomorrow.

maybe ever..................

 

[Astroboy]

maybe ever..................

Sometimes I think .... China is something like "beyond our imagination". So it is also possible that China may be able to attain "Chinese Capitalism", being totally different from what we see before.

Used to be ... Westerners said Japan is inscrutable. Today Westerners & Japanese say China is inscrutable. Cannot be helped as China's presence has become more than before.

Carry on.

 

[bammbamm&pebbles]

I won't put too much faith in Western media.

We travel to China all the times.We see things with our own eyes. And public protests are quite common in China these days.

Demonize China Campaign

There is a recent talk of democratize China's political system by 2020.I think it will model on Singapore parliamentary government ( 議院内閣制 ).China also learnt the adoptation of ' basket of currencies ' from Singapore.

http://www.merkfund.com/merk-perspective/insights/2005-07-26.html

maybe ever..................

A lesson from America's closet of skeletons,US & Native American treaties.

 

[ManchuTaiwanese]

Sometimes I think .... China is something like "beyond our imagination". So it is also possible that China may be able to attain "Chinese Capitalism", being totally different from what we see before.
Used to be ... Westerners said Japan is inscrutable. Today Westerners & Japanese say China is inscrutable. Cannot be helped as China's presence has become more than before.
Carry on.

I don't think there is such a thing called Chinese Capitalism system. The current Chinese economy model is not much different from other Asian economies such as Japan, Taiwan, S Korea, etc.....East Asian brand of Capitalist economy always focuses on a government-lead industrial policy. The governments in East Asia always play an active role in the development of national economy. The only difference is that Japan or some other East Asian economies do it in a more subtle way than China does. Another difference is that China (or in the case of Taiwan) has a rather closed financial system because Chinese in general have no faith in a credit-based system which is a driving force of the world economy. Chinese people just don't believe borrowing is a good habit.

 

[Astroboy]

Another difference is that China (or in the case of Taiwan) has a rather closed financial system because Chinese in general have no faith in a credit-based system which is a driving force of the world economy. Chinese people just don't believe borrowing is a good habit.

But Record China said .... Guest Labors from rural areas are estimated at some 226 million in 2007, and as export factories have increasingly been closed and construction industry entered into recession in China's urban areas, some 10% of those Guest Labors (mostly farmers) will become jobless, meaning some 22 million workers will be unemployed.
http://www.recordchina.co.jp/group/g25632.html


Even though China does not trust Western Capitalism, Chinese government has to tackle unemployment issue in China. Are there any solution without using orthodox theory of economics ???

 

[Dogen Z]

If I'm not mistakent Deng Xaio Ping helped China adopt a market economy. Isn't that true? So the government understands western capitalism quite well. In fact, one of the leaders, I forget who, knew that assets=liabilities+equity. How many in the LDP know even that much?

Now, China is using Keynesian economics to keep growth on a positive track with a half trillion dollar fiscal stimulus. And I doubt it woulg be spent on bridges to nowhere. The leaders seem to be smarter than that. And a billion people is a huge market that could keep a development going for a long time.

Let's hope all of Asia can join in and benefit from this. Then help the world recover.

 

[Astroboy]

China fears grow over job losses
China has said its employment outlook is "grim", amid worries that economic problems could lead to social unrest.
BBC NEWS | Asia-Pacific | China fears grow over job losses

Japanese NIKKEI also warns that China's unemployment rate will go up to some 4.2% in 2008. It is said that some 24 million young workers enter the job market in China EVERY YEAR. Plus guest workers from rural area has already reached the level of 230 million...

Reportedly the Chinese officiasl figures about unemployment rate do not include guest workers. So real figures must be more than 10% unless they can find the job.

Many people of the West say China will be one of the superpowers in 21st century, but it may become one of super-chaotic countries in the world.