Having returned from Shanghai over the weekend I felt I should share again my experience of the Chinese market outlook and incredibly scary property market situation there.
The newspapers in China are all government owned and very strictly control any journalistic observations that run remotely counter to the party line.
Last week the China Daily newspaper actually ran an article talking about the mounting local government debt issues concerning China's banks as property prices begin to fall quickly - the 2 fold result is a gross reduction in new land sales income and an eventual inability to pay bank loans on infrastructure projects that they have been forced into to maintain "growth".
This kind of news article is NEVER printed in China UNLESS the government is trying to soften the expectations of the general populace and lower expectations of future prosperity.
It's really difficult to articulate just how different the business environment and cultural mindset is in the middle kingdom however this article is a great window into this world and saves me writing a massive post. It is by no means a comprehensive justification for my concerns regarding China's economy however it goes a way to show just how little we in the west collectively know about the real workings of the place.
In short, the real information about the workings inside China comes from people inside the Chinese economy and not from the official statistics posted on Reuters from the Chinese statistics offices (funnily enough). Unfortunately most of the people doing the deals and making the money are making it outside "the rules" and therefore have no incentive to draw light on the workings of the grey markets.
This article is a little sensationalist as this guy wants people to come back to his blog obviously however in my opinion the general nature of this piece is very harrowing.
Enjoy peeps - http://globaleconomicanalysis.blogsp...s-housing.html
Makes a case for the toppy looking formations in the AUD and NZD at present.
Have a great week everyone!
4x.
The newspapers in China are all government owned and very strictly control any journalistic observations that run remotely counter to the party line.
Last week the China Daily newspaper actually ran an article talking about the mounting local government debt issues concerning China's banks as property prices begin to fall quickly - the 2 fold result is a gross reduction in new land sales income and an eventual inability to pay bank loans on infrastructure projects that they have been forced into to maintain "growth".
This kind of news article is NEVER printed in China UNLESS the government is trying to soften the expectations of the general populace and lower expectations of future prosperity.
It's really difficult to articulate just how different the business environment and cultural mindset is in the middle kingdom however this article is a great window into this world and saves me writing a massive post. It is by no means a comprehensive justification for my concerns regarding China's economy however it goes a way to show just how little we in the west collectively know about the real workings of the place.
In short, the real information about the workings inside China comes from people inside the Chinese economy and not from the official statistics posted on Reuters from the Chinese statistics offices (funnily enough). Unfortunately most of the people doing the deals and making the money are making it outside "the rules" and therefore have no incentive to draw light on the workings of the grey markets.
This article is a little sensationalist as this guy wants people to come back to his blog obviously however in my opinion the general nature of this piece is very harrowing.
Enjoy peeps - http://globaleconomicanalysis.blogsp...s-housing.html
Makes a case for the toppy looking formations in the AUD and NZD at present.
Have a great week everyone!
4x.
and green pips to you.
)
