And to be fair, there’s no reason to be so bullish on China as to ignore certain underlying problems. Real Estate is the basis of the economy. From what I understand, leveraging price of Real Estate is partly how the chinese provinces financed their state driven investment and debt. All societies have to deal with this problem, only the president of the United States went on camera and said he’ll do nothing to improve affordability because anyone who isn’t a landlord is lazy and doesn’t deserve a home.
Yeah @xiaohongshu@hexbear.net had a long comment write up about this sometime last year, not sure if I could find it now as I don’t think I saved it. But essentially the local governments are in a deep debt crisis right now because of it
A lot of that was also due to them holding a lot that debt in dollars, at least if I remember XHS’ analysis.
A long running theory in the news mega is that the US govt has been pushing the Fed to manipulate interest rates to apply/relax pressure on Chinese local govt., usually to extract concessions on things like rare earth metal exports.
I’m talking about local Chinese authorities not central govt. They have their own debt crises going on and it’s extremely related to property price crashes. I think they basically borrowed a ton of money to build developments where no one wants to live or something
Literally only a crisis in a society that ties your ability to save wealth and retire to the value of your house
And to be fair, there’s no reason to be so bullish on China as to ignore certain underlying problems. Real Estate is the basis of the economy. From what I understand, leveraging price of Real Estate is partly how the chinese provinces financed their state driven investment and debt. All societies have to deal with this problem, only the president of the United States went on camera and said he’ll do nothing to improve affordability because anyone who isn’t a landlord is lazy and doesn’t deserve a home.
Yeah @xiaohongshu@hexbear.net had a long comment write up about this sometime last year, not sure if I could find it now as I don’t think I saved it. But essentially the local governments are in a deep debt crisis right now because of it
A lot of that was also due to them holding a lot that debt in dollars, at least if I remember XHS’ analysis.
A long running theory in the news mega is that the US govt has been pushing the Fed to manipulate interest rates to apply/relax pressure on Chinese local govt., usually to extract concessions on things like rare earth metal exports.
I’m talking about local Chinese authorities not central govt. They have their own debt crises going on and it’s extremely related to property price crashes. I think they basically borrowed a ton of money to build developments where no one wants to live or something
Ah i thought the dollars were held at local govt too my bad