Andy Xie, an independent economist, explains why a stimulus bazooka is “certainly not coming.”
Beijing has ‘no political incentive’ to bail out the property sector, economist says
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Andy Xie, an independent economist, explains why a stimulus bazooka is “certainly not coming.”
The right approach is: the housing investors will have to lose money as they are the culprits to begin with (“houses are to live in, not for speculation”). But the people who bought the houses in advance should receive the houses to be built. China’s government has followed this strategy. The investors should have put their money to China’s startups rather than on housing market, that make everyone suffer because of speculation.
Chinese bot 🤣 CCP propaganda
@@boiscooka232 and you are NSA propaganda😄
exactly, that’s the way should be. investors can also go to stock, commodity, and money market.
@@boiscooka232bot or not, it’s d truth.
It’s ok, u’re too far brainwashed in 1984 West.
This approach will kill household balance sheet and thus domestic consumption.
The chinese government is heading into right direction otherwise it end up like australia. Short term pain with long term gain
China’s leaders have Russia to thank for the lessons as they transition from Communism to Capitalism. So far China has avoided much of the ills of Capitalism while retaining their Communist core. Not perfect but exemplary.
Estimated 8 years aren’t considered as short term..
@@ssuwandi3240 how do you derive the 8 years?
@@sapaiyo9810 several experts Chief of Economists have concluded the time to clear out those 60 million empty and half finished homes based on the pace of slow recovery .
In 10 years time China will be China. China may be evolving at speed and scale beyond comprehension, but it is always China. Period.
The real excitement is when China makes chips that escape the heat issues arising from conventional semiconductors.
That day will never come!
😂😂😂😂
This is the same guy from opening scene of Temple of Doom…hope his palm has healed
The guest so decisively replied china govt has no political incentive, i would say strategic incentive to bail out the property sector. A lot you can learn from this guest about china govt thinking. Too bad such guest will unlikely to be invited again.
Oh I think he will. His explanation makes sense and foreign investors are listening and staying away. Foreign governments are listening and raising tarriff’s
Chinese government has only one political incentive – remain in power for the long term stability and economic progress of the country. That stability depends on their citizens’ prosperity and peaceful livelihoods. China’s leaders have Russia to thank for the lessons as they transition from Communism to Capitalism. So far China has avoided much of the ills of Capitalism while retaining their Communist core. Not perfect but exemplary.
@@CalvinK-the_old_fogey
Seriously? I can’t
@@kwokleongawyong2895 seriously, you can … 👌
Chinese President Xi once claimed, “houses are for living, not for financial speculation.” He really meant it.
The goat 🐐 🙌 a real leader. No zionist owns him like others
He also laid down Three Red Lines years ago. He gave plenty of warnings to the developers on what the govt is expected of them.
Frankly I believe Xi more than any western politician. Xi has the power & the will to do, because talk is a waste time & energy
@@remix-yy1hs Meanwhile in the great state of California, houses are only for speculators, not for ordinary citizens to live in.
@@MetaView7
Yup
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Huge Price Cuts Rumored From Chinese Developers Due To Collapsing Demand
Vincent Fernando, CFA May 29, 2010
Demand is falling since China’s central government announced stricter regulations for property transactions during the middle of April. These involve higher down payments and mortgage rates for the purchase of second home, and act which is seen as potential speculation. Such tightening is reducing buying demand.
Thus a moderately bearish view is that property prices need to come down, since demand is likely down yet supply is the same. This challenge isn’t limited to Shanghai:
China Vanke Co, the country’s largest publicly listed developer, may cut apartment prices by 10 to 30 percent within three months, the Beijing News said yesterday, citing an unidentified sales agent. Local Vanke officials declined to comment yesterday.
Yet Shanghai is where things could get the ugliest, the earliest. This is because the local Shanghai government is planning to clamp down on speculation even harder than China’s central government already has:
Chen Qiwei, a spokesman for the Shanghai municipal government, did not preclude the possibility of levying property tax when asked about this issue at a press conference on Friday.
“Shanghai will take more strict measures in line with the central government policy,” Chen said, adding that more efforts will be made in building economically affordable houses and cracking down on speculative house purchasing.
Other cities such as Beijing, Chongqing, and Shenzen could have similar additional taxes, but Shanghai is the first to make an official comment such as above according to China Daily. Thing is, any action from Shanghai will likely need approval from the central government.
BusinessInsider
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Business
Economics
China Increases Banks’ Reserve Ratios to Cool Prices
By Bloomberg News
December 10, 2010 at 4:08 AM PST
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China raises banks’ reserve ratios again
Reuters
December 10, 20104:27 AM PSTUpdated 13 years ago
Dec 10, 2010 — The 50 basis point increase, which takes effect on Dec 20, will leave required reserve ratios at 18.5 percent
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China Property Market ‘Bubble’ Set to Burst, Xie Says
By Bloomberg News
February 1, 2010 at 11:51 PM PST
China’s property market “bubble” is set to burst as the government curbs credit growth and clamps down on speculation, according to independent economist Andy Xie.
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China cracks down on speculators to cool prices
BY THE ASSOCIATED PRESS
NOV. 23, 2010
The government has ordered banks twice in the past three weeks to raise the amount of money they hold in reserves to rein in lending growth.
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China cracks down on property speculation Source:Global Times Published: 2010
The Chinese government has raised the down payment for second-home buyers to a minimum 50 percent of the value from 40 percent, in a bid to curb property speculation.
The decision was announced in a statement released Thursday after conclusion of an executive meeting of the State Council, the Cabinet, presided over by Premier Wen Jiabao, on Wednesday.
First-home buyers must pay no less than 30 percent of the the property price if the area is above 90 square meters, the statement said.
The government was stepping up the introduction of tax policies to influence purchases and adjust property investment returns, said the statement.
Nationwide, land use for the construction of low-income housing, shanty town renovation and small and medium-sized homes (below 90 square meters) should account for at least 70 percent of the land approved for property development, the statement said.
It also urged local authorities to accelerate housing construction approvals to ensure effective land supply, and crack down on land hoarding and speculatory behavior.
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China attempts to deflate its unstable property bubble
China is to spend $200bn on low-cost homes as part of a series of measures to slow the rapidly rising prices of urban houses
Tania Branigan in Beijing
Wed 9 Mar 2011 19.24 GMT
Chinese officials are blaming speculators for soaring property prices and are vowing to build 36m affordable homes over the next five years. There are already widespread concerns about China’s booming property market and the threat it poses to the country’s expanding economy.
China would spend nearly $200bn (£123bn) on an affordable homes and social housing scheme, said deputy housing minister Qi Ji in Beijing .
The pledge came a few days after premier Wen Jiabao promised to “resolutely” curb speculation to tackle excessively rapid price increases
The authorities have taken various steps since spring last year to dampen the property market. These include raising interest rates, increasing the minimum downpayment required on second homes and restricting the rights of foreigners to buy property. Two Chinese cities are now imposing sales tax on property deals.
While the measures have slowed growth, many fear it remains too high. In March 2010, urban housing prices shot up by 11.7% year-on-year, according to figures from the national bureau of statistics. December saw the lowest increase in more than a year, but it still stood at 6.4%.
The Guardian
You know China is not Capitalist country when they’re refusing to bail out these spoiled big corps complaining at the slightest discomfort. Bursting the bubble on your own term is much better than postponing it and act like the problem is gone.
US wanted China government to bailout the property sector so Chinese will have extra money to spend on Western luxury products, same time take away the money from China government to invest in technology so China will lag behind the technology from the West.
Say what you want. CPC aint dumb to destroy China technology development to bailout property sector.
I love this guy! I don’t know why?…
I regularly scour the internet for anything from Andy. He is one of a kind
so do I @@shaundudley4576
They won’t listen, Andy.
And that’s good!
Looks like the teacher from South Park
AS A WESTERN WE FUNDAMENTALLY BELIEVE CHINA SHOULD FOLLOW OUR ECONOMIC PATH OF DEVELOPMENT..THEY HAVE TOLD THE WEST THAT THEY ARE ENDING ALL SPECULATION IN THEIR ECONOMY. LESS THAN 10% OF THEIR POPULATION OWN STOCKS ON THE CHINESE STOCK MARKET. THEY ANNOUNCED THAT REAL ESTATE SPECULATION IS MAKING HOUSING UNAFFORDABLE FOR THEIR CITIZENS..YES THEY POPPED THE BOBBLE , THIS WAS THEIR INTENTION. MASSIVE STIMULATION ONLY PROPS UP A NATIONS GDP NOT A HEALTH ECONOMIC INDICATOR…IN CHINA IF YOU FAIL YOU FAIL. THERE IS NO TOO BIG TO FAIL. THEY HAVE MOVED AWAY FROM REAL ESTATE ECONOMICS GROWTH MODEL TO MANUFACTURING HIGH VALUE ADDED PRODUCTS..THEY HAVE 12 TO 18 TRILLION DOLLARS IN DOMESTIC SAVINGS AND 1.2 TRILLION DOLLARS ANNUALLY. THE CHINESE ECONOMY IS IN TRANSITION.
I LIKE THIS GUY. HE IS HONEST RATIONAL AND TELLING THE WEST WE DO NOT WANT TO HEAR. CHINA IS FAR FROM COLLAPSING.
You are delusional!
A reset to the property market is a good thing, as housing become affordable again with the more than 60% price drop. These housing developer need to learn that borrowing too much will resulting in the burst of the bubble they build up for their profit. Now the younger generations finally get a chance to own their own home.
housing will get cheaper for the younger generation simply due to population decline. We are coming off a population boom where they keep making houses for the increasing population. When the older population dies off. Guess what become of these houses. No one stays in them there is going to be more houses then there is people then there is more supply then demand and housing prices will go down.
That’s if they can find jobs in the first place, they should have introduced measures a long time ago not when a bubble had already formed, there are 15 milion new people added to the workforce each year and not enough jobs to go around. Houses are still out of reach of the average salaryman in China, that is if they are even employed in the first place, also this affects those who already have a mortgage as Chinese banks will auction a house once a payment is missed.
@@Vincent-mv6ux I heard that are not auctioning now because no one buys and everytime an auction happens the price of the house keeps dropping. And the owner also just refuses to pay the difference so it becomes a loss. And now they are not going to find jobs more. Less economical activity is not going to help the people coming into the market. I am just making the point that choosing between inflation or being jobless and no income inflation would be a better option
@@Vincent-mv6ux then I am just watching what is going to unfold. If there is no economical activity there is simply going to be less taxes and income for the govt. More activity lower taxes and less regulation and less blaming of everyone else would give a better outcome. But they want to look good and have more control. And for me I just popcorn.
@@Vincent-mv6ux Trust is the currency. Without trust there is no credit. Without credit there is no instalments aka you can make in the future to pay the instalments. You just have to pay it now. And then prices will just drop
Having over inflated housing prices do not benefit the average citizen.
Looks at all the anglo nations, they are equating wealth with housing prices but, in the long run High housing prices is back breaking to most of their citizens who aren’t home owners. High housing prices also mean high rent. I can tell you people are paying 3-4k rent for a 2 br in New York. In that 2 br there are about 4-5 people living there splitting the cost. That used to be something that only immigrants do but, not anymore. The average american is suffering from high living expense when compared to their wages.
The real Story is the wall street want Chinese Government bail out the real estate sector , because for last decade these hedge fund and other speculators pour a lot of money into this sector though the grey market when the government tight up the loan to the developers, now their money had been stranded there when the government prick out bubble , they need explain the authority how the money came into the country if they want to sent the money out.,
That is why they care so much for the sector bail out
Xi is just punishing its spoiled and reckless billionaires.
Paid to SCMP specifically for Andy Xie’s articles!
The favorite pastime for Aussies is property speculating. It is only a matter of time before the bubble becomes unsustainable.
People in china serves the CCP.
he dont even know english lol
So what? He lives in China. I bet his English skills are better than your mandarin skills. Can you do a similar interview in mandarin on Chinese television?
He is 10x smarter then your whole family tree 🌳 😂
“doesn’t”
SB😅
*He doesn’t.
No political incentive, hmm. I guess the people’s suffering is unimportant. The only incentive that matters is political. Let’s see whether the people get angry enough to make it political.
Which people? Who is suffering because of lower property prices?
Wall Street speculators
The only ones who is suffering from this are property speculators and greedy landlords. They are now knocking on US borders to escape debt and restart their property game in US instead 😁
In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities
By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities
That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers.
Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate.
Even then, It took them almost 14 years to get their overheated real estate under control
Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018
Why is their Central Government doing this?
Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen.
Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need
In China
Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married
Thus the common prosperity push and the crackdown on the overt displays of wealth in China
Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest
the solution is simple the vast majority of the people investing in these property developers, these last few years were well off Chinese or sophisticated foreign investors
The people these property developers owe homes to in China?
can be given a home that was built by these developers, the remaining can be sold at a discount to those around 300 million rural country folk still expected to migrate to the cities and join their more well off Chinese urban countrymen
Although these homes, might not be in a city these people choose but it is the risk these people knowingly took even with the writing on the wall for 14 years
(These people took a risk hoping the CCP Government would bail them out)
Win win for everyone people owed a home get a home, rural migrants get a more luxurious home at a discount 😉
And the well off Chinese/Sophisticated Foreign Investors get back a few more pennies on the dollar…
Cut off from money flow by the Chinese Central Government for over 12 years starting in 2010
Chinese Property Developers “Junk Bonds” they were flogging, these last 2 years
suddenly started to become a hot commodity by “Sophisticated Foreign Investors”
The general consensus was the Chinese Central Government would backstop these junk bonds
I actually had a few old colleagues reach out to me for advice from back in my investment banking days..
Since they knew I had been researching China investments since the late 1980s
My reply to them was “Not when their Government has cut off the money flow to these companies for over a decade”
They did not listen….🤷
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A 99% Bond Wipeout Hands Hedge Funds a Harsh Lesson on China
Bloomberg) — From afar, China Evergrande Group had all the makings of a killer distressed-debt trade: $19 billion in defaulted offshore bonds; $242 billion in assets; and a government that appeared determined to prop up the country’s faltering property market.
So US and European hedge funds piled into the debt, envisioning big payouts to juice their returns.
What they got instead over the course of the next two years is a harsh lesson in the dangers of trying to bargain with the Communist Party.
The talks are now dead — a Hong Kong court has ordered Evergrande’s liquidation, and the bonds are nearly worthless, trading in secondary markets at just 1 cent on the dollar.
Bloomberg
City GDP
The only people that are suffering were those speculators with few properties on hands. The only people that will benefit from this crash are those couples that couldn’t afford to buy a home to start a new family because of those speculators. China is not like the West, she will not help the rich to get richer while the middle class becomes poorer, and the poors become homeless. Furthermore, China will not be controlled by corporates like those BlackStone and BlackRock.
Agree I cannot see why they say China is not growing. It is still growing and moving. But the RoW does not seem important given the anti Chinese sentiment.
Andy Xie was the chief economist at Morgan Stanley Hong Kong 20 years ago, a very sharp guy but couldn’t make his boss happy. He left MS in 2006 and became an independent economist, which gave him much more freedom to talk about his economic views with honesty. His views about China economy is always interesting to listen to.
Agreed. He understands how the CCP think
@@Andy-Pit’s clear to me this guy has no understanding of China. Please look at other posts. HK people are looked at by Beijing as outsiders so they will never be in the inner sanctum of power.
Jus a communist stooge
Beijing had warned those specilating in the property market – housing are for residence / staying. Beijing want to assist only those genuine buyers and genuine developers.
certainly there is no political incentive to bail out the property sector. the money has been locked in the property and cannot be liquidated and transferred overseas.
Wall Street invested many billions into China property for years, Xi warned but they didn’t listen. Wall Street thinks that China is like US government that protects the rich by bail outs. That’s why US media is critical of China government
Andy
The IMF wanted to give China 1 trillion to “bail out housing.” IMF should give that money to the U.S
IMF is funny. China has a few trillions under her mattress.
Don’t worry about China, Chinese politicians are way more competent than US politicians.
My take away is he said he will allow the default of the banks holdings real estate loans. If central banks government dont help that is a lot of savings lost as more people head into old age and will hit domestic consumption as people’s savings will ultimately pay for the real estate debt.
As he said CCP doesn’t care about the people just technological self sufficiently.
It would be false to say Chinese government don ‘t care. There was for many years a drive to eliminate poverty in China, and they have succeeded. They don ‘t have to, but they choose to.
I am sure you see China in same light as the U.S., because it is U.S. we see homelessmess everywhere in the cities. This is not how Chinese work. In addition, this drive for productivity and technology a tool to provide for its people, and not for private investors to make money which is the approach of the West. China is not like the U.S., a plutocracy run by the powerful and the rich.
Sad people to says to things they don’t know. Go to China, eat better and live better. @@Andy-P
@@liongjiahwong5478 Where are the people’s savings then?
@@Andy-P every Chinese person will have savings for the rainy day. Same everywhere, not only in China. Even for me at 78, I do have substantial savings and also for my funeral.
No political incentives because no lobbyists that finance the political elections. Different system.
Please ask Gordon Chang for a second opinion ! This guy only told you the good side of the story ……
You mean that Gordon Chang that has been predicting the collapse of China every year for umpteen years 😅
The Gordon who predicted collapse during the 30 of growth the largest scale ever witness in the same timeframe in the history of mankind. That Gordon Chang?
lol speculator needs to lose money~ they earn too much
Why bail out the property firms to pay the offshore banksters…😂😂
No shit. China intentionally deflate it. And willingly bear short term pain for allocating credit that used to funnel in real estate into hi tech and manufacture.
I wonder in democracy is it possible to willingly bear short term pain? It is very unlikely it is suicidal for the politician career
Too many houses in China….too many homeless in America. Which government doesn’t care?
Houses are for living and not speculation.
If people needs Houses and homes Beijing will build them in 3 months
That’s exactly what they do not want to do because that’s reverting back to socialist public housing. China has transitioned to Capitalism profiting from a market economy while retaining their Communist core. Not perfect but exemplary.
OMG I can’t believe how dumb western MSM and politicians are. Get it through your head, China’s property market correction was ENGINEERED by the CPC. They did it intentionally! It was by design and it is unfolding exactly as they planned it. So why on Earth would they bail out the property sector? That would be defeating the purpose.
👍👍👍 Why bail lot speculators🙄 let housing deflate. Cheaper homes, more young ppl can afford and more housing in the market. Win win and win🙌🙌🙌
This guy has no idea what he is talking about. My Chinese friends whom are in Senior banking positions, etc….. economy is in a free fall. They expect the economy go down even more!
Yes , Gordon Chang told me the same as well !
Like I said above, this guy is lying to people. I’m Chinese and I’ve been doing business in China and Asia for over 30 years. I have personal friends who are in senior banking positions in China and many other sectors. Some are proud flag waving CCP, they all admit it’s going down and 1 of them mentioned the fall has not even started and will get much worse. He was the Chinese banker who warned me BEFORE COVID of the impending implosion in the real estate sector….. if I was you I wouldn’t listen to this propagandists. I get my market information on the ground and what is really happening. All the GDP, stats are made up by the CCP. I’ve always known my whole life if the Chinese give you a number, you divide it by at LEAST 2 and you MIGHT get the real number……. anybody who is Chinese or work with China for a long time knows what I mean 😂😂
Yes emperor xi. Keep doing what you are doing.😂😂 thank you. Emperor xi is a member of the USA CIA
Noon oo takot ang America sa diclair ni trump dominate the china technology. Yan lahat nag start gulo ninyo. If I’m a new
Us a government management matatakot ako na bumagsak us new management how I protect my position in decades. Us a management how I continue if all also against the dollars. America government tinago lahat nang mga part ni federal aftr he die. So all new management in ameeica think only profit in dollars. Clinton he saw the fed when grnd fa diclair died. Bush. And Biden all their father they serve already in America leader . So they know wht rule of America to everyone only a new management they worried about china growth but us a federation I laughed. When dollars alls said fake gold truet. I laughed bur when all said stop dollars I’m angry??? Madness.. why????? Bcz that’s our main money so why you a hv more curruption 😂😂😂😂. The technology and world TRD not base in position of power. America he has a power authority frm your grnd father federal that United state of America he handle and management here central banking system worldwide fir security of the military international. No china no Philippines no India no singgapore no European no Russian can distry that authority even me. Dream of head government to change that authority using to try war. Pandemic and dominate the world fiat currency.. only one money owner we hv not your government not your general military not your presedent. Only you work all in wealthy of emperial central federal system okay
Kahit ako diko kayang palitan yang sumpaan na iyan sa lahat na management is America until world still hv federal continues to feedings
No bailout.
Hahahah sounds like a HK communist 😂😂😂
Andy is the man
Yuan vs USD: Yuan 7.09 vs USD $1.00 at this exact moment Eastern Daylight Savings Time, Boston, MA. 0:56
Andy is a smart guy.
China shouldn’t bail out the property market.
Let everyone enjoy the cheaper houses and rental.
The property speculators , property developers will get pain but they should live with it.