The Coming Black Swan from China.

I have only seen a few other websites even mention this, I could'nt find any other threads about this topic.

www.zerohedge.com...

Another “growth story” is dying before our very eyes. China is rapidly approaching ZERO growth. This is not less growth, but ZERO growth as in full-scale economic collapse from the days of 12% GDP growth per year.

I'm no financial expert by any means, but even I know 0 percent GDP is bad. Can it go into the negatives?

This is a Black Swan that few are noticing. If you look around the mainstream financial media in the US, you see talk of Bernanke tapering, discussions of rising interest rates and even the occasional story about how Europe is not fixed. But you won’t find stories about China facing ZERO growth. There’s only one I’ve seen and it was published in the Telegraph, a British newspaper.

Thoughts? Opinions?

reply to post by Cancerwarrior


Don't think it's credible...scroll down to where they tell you to sign up for their free special report which will most certainly push you to purchase their newsletter...

Maybe it has something to do with this?
China Building Mega Cities

In Inner Mongolia, developers built the city of Ordos for one million people. But most of it remains empty. Early last year the BBC reported Ordos was the largest ghost town in China, and that the housing bubble there had already burst. Mr Tulloch told 60 Minutes China's government had spent an estimated US$2 trillion to build the cities and to keep the country's economy going. "They've simply built too much infrastructure too quickly," he said. "People are being moved into the cities but that doesn't necessarily mean they can afford these apartments which cost US$100,000. These are poor people moving into the cities, so they're building the wrong kind of apartments. "There are multiple classes of people that are going to get wiped out by this, people who have invested three generations' worth of savings into properties will see their savings evaporated." Read more: www.news.com.au... xzz2Zt79ZjS8

Quite a few already know and seen the signs of the impending economy trouble of China but the problem here is, the US will be greatly affected too. Both will be tethering on the brink of collapse that the only way to get out is...make war. China the way it is going now is trying to foment one in the near horizon they know their gov't will fall if they don't make any stupid move, they had to or let China break-up like the USSR.
Same thing with US.

reply to post by chrismarco


I found another source saying the same thing. Maybe this one is better.

seekingalpha.com...

"China saw the biggest credit expansion relative to GDP over the past decade than any other country in modern history. China's M2 GDP ratio now stands at 187%, its gross capital formation GDP ratio at 48%, and its credit (based on total social financing) GDP ratio at 176%."

I know China has about 50 percent of its GDP in manufacturing. Well people aren't buying their exports like they once were. Their middle class is supposedly emerging, but most of the country lives in poverty.

reply to post by whatnext21


So basically mal-investments and ponzi scheming is what's doing this to them?

That sounds kind of familiar alright.

reply to post by marhaba


I guess its just a matter of time to see who is first, because I really believe that with this whole "global economy" going on today, all it takes is for one major country to default on its loans. The rest will fall like dominoes.

Well China has been faking figures for years and that's not exactly a secret either

The Chinese government is understating its inflation problem,

Making its economy look stronger than it actually is. inflation is under-reported by as much as 4 to 5% a year

The bankers pulled the plug on China as soon China began to threaten its neighbors and western allies with all its new found wealth from western big corps, company's & investors

China recently attempted in buying out these company's and corps and when refused began to steal technology to copy

Bye bye China

Originally posted by Cancerwarrior
reply to post by chrismarco

 

I found another source saying the same thing. Maybe this one is better.

seekingalpha.com...

"China saw the biggest credit expansion relative to GDP over the past decade than any other country in modern history. China's M2 GDP ratio now stands at 187%, its gross capital formation GDP ratio at 48%, and its credit (based on total social financing) GDP ratio at 176%."

I know China has about 50 percent of its GDP in manufacturing. Well people aren't buying their exports like they once were. Their middle class is supposedly emerging, but most of the country lives in poverty.

I think that 50% GDP in manufacturing is shrinking at a huge rate year tbh

China has also been faking its export figures for some time too

I bought about 40+ items from China on Ebay over the last few years

Not this year tho...

Every single item be it a fan, usb, clothes, what ever, fell apart after the first hour, day, week, or was totally fake, on a couple of occasions never worked right from opening the package

Fake copied crap or a build quality you would expect from an uneducated inexperienced worker slaving for peanuts, what else should i have expected really after all the watchdogs warnings

Thankfully i will never be buying a single piece of consumer product from China ever again, and i would expect many more people across the world have had much of the same experience as me and conclusion

I've been hearing little scoops about an ongoing labor revolt problem in China, but as for finding recent sources and details, they are harder to find.

Labour Unrest and a Slowing Economy in China: Unpaid Wages Spark Strikes

Another that tells an interesting story is the following: An $8 fine if late from a 2-min break and fired automatically if it happens a second time. Chinese workers take managers hostage over toilet breaks

And if you look up Apple workers China you will find umpteen ongoing problems there too, from unfair demands and technical expectation without training provided, to poor design and flaws that were blamed on the workers. It was there that nine workers killed themselves.

The financial and economic problems in China are actually widely acknowledged, often appearing in MSM, though most often in the UK Telegraph and some of the financial news networks such as Marketwatch, CNBC and Bloomberg.


Here's a couple of articles for your reading from the UK Telegraph in the past week:

China risks deflation trap as true GDP crumbles

China eyes fresh stimulus as economy stalls, sets 7pc growth floor

China capitulates

In other words, to hell with inflationary pressures, to hell with the massive credit bubble, to hell with the property bubble, to hell with slowing economic growth - it is intolerable and unacceptable as likely internal social tensions grow.

Recent small moves to tighten showed China just what precarious situation they are now in when local borrowing costs surged overnight (can't recall how much) to the point of a credit squeeze, indeed a credit crunch. Allowing this to continue would of crippled China's country. Now they have, or have at least put on appearances, loosened lending and borrowing requirements to encourage the same credit fueled economic growth to continue.

That credit growth, apparently at a level unprecedented in modern history, is rapidly experiencing dimishing returns on every Yuan invested, as you will read in those articles.

How will this ponzi scheme end? A hard landing? With a pop? Probably more like a massive implosion.

Last year I did a few months of contract work for a Chinese company. My contact was stateside, but the company and most of the work was in China. I had to meet my contact once a week and we would meet for dinner, coffee at Starbucks, whatever. After business was out of the way, we would just chat.

I had lots of questions about his home and he was not afraid to talk to me. The company was located in Huxian or Hu Jiang (another possible spelling of the area).

He told me that China was not doing as well as the rest of the world thought it was. There was a problem finding skilled people and that the younger generation...get this....were now too "westernized" to fit into the Chinese way of doing business. He said that none of them wanted to start out small in a company and learn and grow. He said they all were spoiled and the ones that had actually gotten an engineering degree expected to make big money right away and would not work as an apprentice so they could actually learn.

It was a pretty eye opening experience. He went on to say that the class divides were so extreme it was unbelievable. The wealthy, were very wealthy. The middle class did ok but he said they did not equate to what Americans consider "middle class" and then he said it dropped right into extreme poverty.

I asked why they were building so many "ghost" cities and he said "the Government needs to keep people busy or they start asking too many questions".

So...that is my brief experience with the far east...it was interesting and informative.

Looks like China is going to need that $1.2 Trillion the US owes them.. we better start a war with them before they ask for it back...

One of the main drivers behind the TPP agreement is planing for a post-China economy.

The fact that china's growth has been greatly overstated has been an open secret for quite a few years now. I'm not a fan of TPP, but I've got to admit that it's a pretty good solution to quite a lot of the problems that will arise with china's decline.

Originally posted by RocksFromSpace
Looks like China is going to need that $1.2 Trillion the US owes them.. we better start a war with them before they ask for it back...

Uh..... why?

Do you people really not understand how debt works?

If you owe your credit card company 20,000, they don't just say "OK, give me 20 grand NOW!" You owe them a minimum payment per month, and if you keep that up, there is nothing they can do.

The US does not owe China trillions of dollars outright. We owe them installments. As long as we keep up with installments, china can NOT just say "give us all our money" What sense would that make?

I'm not saying the US debt isn't an issue, but countries can NOT just say "we want all our money!" anymore than your credit card company can just say "give us everything you owe us!" It doesn't work that way. It's basically a payment plan.

And if the US stopped paying china anything, what are they going to do? Swim across the ocean and ask politely for the money?

reply to post by RocksFromSpace

Looks like China is going to need that $1.2 Trillion the US owes them.. we better start a war with them before they ask for it back...

How is starting a war (that will cost the US an exorbitant amount of money) going to free the US from debt?

reply to post by Cancerwarrior


Black Swan is code-name for zero growth?

Oops... Lucky my avatar is white.

reply to post by swanne


Typically they are random and unexpected events in the financial sector.

nope, you are a white swan, nothing to fear here

Definition of 'Black Swan' An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader.

www.investopedia.com...

Originally posted by TritonTaranis
Well China has been faking figures for years and that's not exactly a secret either

The Chinese government is understating its inflation problem,

Making its economy look stronger than it actually is. inflation is under-reported by as much as 4 to 5% a year

This isn't much different from what the west is doing. If our estate is doing it, other estates must in order to balance the fudging. It's just the game being played. Certainly not wise, but it is what it is.

The bankers pulled the plug on China as soon China began to threaten its neighbors and western allies with all its new found wealth from western big corps, company's & investors

China recently attempted in buying out these company's and corps and when refused began to steal technology to copy

Bye bye China

Which bankers? There are western bankers, and eastern bankers. Sounds like the East will pull out of the West, and the West out of the East as it makes more sense for them both.

Well, wages have been rising in China continuously, however, in the US they have remained stagnent for about 10 years.

Maybe we will see a return to manufacturing in the west?