Why China's Economy is Finally Slowing Down
2024 ж. 11 Мам.
1 485 863 Рет қаралды
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Writing by Sam Denby and Tristan Purdy
Editing by Alexander Williard
Animation led by Max Moser
Sound by Graham Haerther
Thumbnail by Simon Buckmaster
References
[1] issuu.com/unhabitat/docs/2499...
[2] www.people.vcu.edu/~wwu/publi...
[3] www.adb.org/sites/default/fil...
[4] www.cato.org/blog/anatomy-chi...
[5] www.nber.org/system/files/wor...
[6] www.xinhuanet.com/english/down...
Reminds me of Canada's housing and innovation situation. The money gets tied up in low risk real estate instead of risky innovations, and thus Canada becomes a technological laggard and slowly falls behind the rest of the world.
Australia as well. So much money tied up in real estate (it's SO common for regular families to have multiple 'investment properties') and as a result the country is an innovator in exactly nothing.
it appears that housing is a common and serious problem that demands a solution. how do you cheaply house people in quality housing without ruining your economy?
@@anthonydpearson And real estate isn't supposed to be a "Get Rich Quick" scheme. A lot of people in the past did it just to supplement their income. Especially if you're just renting out Single-Family homes. In contrast to owning a big apartment building. Something happened. Where the corporate folks got more involved in this scheme. Plus the property taxes, zoning laws, and lack of rent control.
@@PlaystationMasterPS3you treat housing as a public utility instead of an investment vehicle.
Housing has to stop being an investment wealth generator.@@PlaystationMasterPS3
The other part of this that is missed is that local governments were funding themselves via land sales. They can't sell land if the real estate market is in trouble. Worse still they put this money towards GDP growth which many times consisted of infrastructure projects that are not delivering. This has piled up debt for local governments in an uncontrolled way.
And
Yeah. I heard the local governments are turning to fines to generate income. The police will sweep through a neighborhood in the middle of the night to find parking violations. Sometimes even creating those violations by removing parking spaces. There are whole neighborhoods with little to no parking now. And remember that China is a cashless society so people are being charged as they slept.
The debt is probably owned to Chinese people, plus the Real estate bubble popping is a needed correction. Unlike the US gov't, China's gov't will not bail out bad businesses.
You cannot deliver a profit eternally, you people are nuts.
@@Skr0ng The reason that this is important is that GDP growth as stated in China (which the CCP has admitted is flawed) includes the local government spending on these infrastructure projects. This creates a set of double trouble for the PRC. Problem one there is a ton of oddly configured debt through LGSV's (Local Government Special Vehicles) that is not accounted for. In some poorer provinces, the entire budget of the province is spent on servicing this debt. So, there is another large debt overhang that is not accounted for. Problem two is that these governments can not fund these GDP projects if they can not sell land. This will directly impact GDP statistics.
Any situation where the only people buying homes are people who already own multiple homes is already broken, it's just a question of when that actually hits the companies where it hurts.
Over 90% of Chinese own their own home. Look up what it is in your country. You might be surprised.
Agreed!
cough cough a large percentage of university town housing and vacation rentals
Yeah because housing in the West is doing so well 😂😂🙄🥱
@@Uaenehe never said there wasn't ccp bot
As I used to explain to people, these property developments were basically giant concrete bitcoins sold to Chinese investors who didn't see any better options for preserving and growing their wealth.
Sad to think that in this instance just sticking the money in a bank account would have been better. If that's your only option your economy really is tanking.
@@alibushell6762 the problem with that is that a LOT of the money in china stored in banks are in shadow banks(e.g. madoff investment securities). And those banks also went poof because of the crashing real estate + stock market. The stock market also crashed a bit(I think it's somewhat recovered now). Unironically you may have been better off keeping your money in your pillow or something.
Uhhhhh so was the whole crypto hype propped up by Chinese money from people trying to invest in a country where they had limited options?
Actually, most people are forced by the government to buy.😢
@@alibushell6762 Yea but then you don't get any returns. The real issue in China is that only property had decent legal protections from just being seized by the goverment randomly for its own ends. This is unlike the stock market which is almost completely under the control of the central government. This incendent reallly shows the importance of property rights to long term economic health.
Wait are you muscling in on PolyMatter's territory? :p
you know they're part of the same conglomerate right? they're all part of nebula
Holy shit… totally thought that was PolyMatter’s until about two mins in. Then I was like “wait, hold on” 😅
@@alexanderwalls4466i think Wendover came first. Regardless, they do compete in the same type of KZhead documentaries and their style is very much similar.
i literally thought this was a polymatter video until he started talking 😂
Turns out many channels can cover big world news
This is a sincere suggestion, I paused at 10:00 when you were going to talk about the 'how' but not explained the true 'why' the Cjinese people were buying so much houses. As an investment yes, but the deep reason is that China has not developed other ways to invest, for middle and high class. A wealthy Chinese can't invest in the financial market for example, thus housing market became the way to do it. Just an addition, I'm a big fan of the channel, even this video's production value is top notch :D
They can invest in the stock market the average Chinese person just doesn't trust it whether it's to many Chinese companies caught lying or the government cracking down on them. So they invest in housing which can never go wrong lol.
why can’t they invest if you can explain please 😊
@@hari-po1fv it has to do with the control of totalitarian government, they tried to have a stock exchange, it did not go very well because it had restricting rules (I don't remember exactly eedit: I somewhat recall the government wanted to determine the value of important stocks beside market laws) they decided it was not worth it and basically prohibited it for the masses. I'm not saying adopting western model would have been better, but it is true that the people needed a way to use the money they got from the booming economy
There is stock market in China...
@@hari-po1fvThe government owns ***everything***. There is zero TO invest in. If you want to start a business or manufacture a product you must seek permission of the state. Private investment is forbidden. You can put your money in a bank account or buy property. That is it.
The current market/economy is unnecessarily tougher for boomers/senior citizens, I’m used to just buying and holding assets which doesn’t seem applicable to the current rollercoaster market plus inflation is catching up with my portfolio. I’m really worried about survival after retirement.
Just buy and invest in Gold or other reliable stock , the government has failed us and we cant keep living like this.
epater la bourgeoisie
For anyone stupid enough to read this like me, this is a bot. Ignore it
What the fuck is this bot bullshit. Guys, report this and move on
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Evergrande opened a EV company cause china would pay the companies for each EV even if they didn't sell the car to anyone. that's why you find videos or tons of fields of EVs in china that nobody is buying.
Basically everyone I know owns one now, priced around 90000 rmb. Interesting fact, eu as the most sustainability enthusiastic group, now don’t want EV anymore even though it does good for environment
@@ranii3116From what I understand, EU is a trade bloc so it has its members economy at its highest priority. China can make EVs faster and cheaper than European manufacturers so they will likely implement tariffs to help protect members car industry’s (China EVs sales taking away from EU EV sales). Seems to me like an economic > environment sort of thing
@@ranii3116 That's super cheap, $12,500. Average American car price is $48,000, 4x your car price.
@@Sam42069 Yes, you can't fully go all in on just environmental concerns -- economic and security are very important as well.
@@henli-rw5dw But the $12,500 is for a super cheap EV that doesn't fit all the regulations of most or all western countries. BTW, the lowest cost EV in the US is actually $29k and that doesn't include any government rebates.
to be fair, the average salary in China can not be easily compared with other countries since there is a major gap between the rural and urban areas.. that gap is not that much profound in most other countries..
It is not a China problem, it is a developing country problem. Once and if they resolved that. They will be developed countries. On the other hand, bigger and more gaps in the developed countries will turn them back into developing countries. The western countries are developed because of war and colonization, not democracy. The democracy actually makes Western countries weak in competition and will make them lose to authoritarian countries. It is a sad reality.
they compared incomes to housing costs. China's are the worst in the world.
@@sibaraku2023 What evidence do you have to support this claim?
@@guillermogutierrez3845 The human history.
@sibaraku2023 uh... I think your knowledge if history is inaccurate.
This is happening in New Zealand as well, at a smaller scale. Housing is being all bought up by investors or people looking to make money at an increasingly large rate. The value has balooned far outside the actual utility value of the proporty. This is compounded by many extra cases of chinese buyers of course who were buying our property up the same way the video said they bought theres, from overseas, and leaving them empty up until the govt banned overseas buyers in 2017. But those already bought houses are still there, and still empty. The bubble is going to burst at some point, and its gonna be a shitshow
It's happening all over the world. Certainly here in most of Europe, and I hear the same tales from the US and Canada, and parts of South America even. Investors buying up property and driving prices ever higher, and mostly leaving it empty of course. I lived next to a 5 story apartment building owned by someone from Russia. It was empty the whole time I lived where. Apparently it since got sold to someone from Saudi Arabia, and is still empty. Honestly the Spanish Ocupas movement has the right idea, moving into these investment properties that are perpetually empty like that. It's a shame that investment is still considered more important than the right to housing.
The New Zealand housing market already crashed during COVID….. but it’s already taken back all it’s loses. On average in NZ during 2021 houses lost 138k of its value, approximately 18% decline to the market. Are you sure it is a balloon when it already crashed, “deflated” so recently?
@@CMDKeenCZ One would think that they would have tenants, but I digress. How History Works made a video on this basically we're entering the end of a 400-year-old cycle, except this time it's the cities that are getting more expensive.
@@KRYMauLFinishing out a building and renting it out is costly. The buyers don't want to own a building, their only goal is to sell it at a higher price to someone else. It's pure speculation, and the fact that the object in question is a building is hardly relevant. It might as well be a stock, or a baseball card, or a ... you know, one of those tokens that attracts the bots if you mention it.
Will the bubble burst though if our population keeps growing? plus you cant build a new house for less than the price of buying an existing one so why would house prices go down?
The crunchy and distorted background music is mega annoying in this one. Go easy on the normalization plugin.
Yeah something really broke here. Watching on Nebula and came to find the KZhead version specifically to see if anyone had mentioned it in the comments 😂
Shit I was already googling for new headphones
I mentioned this in another recent video, it's so distracting I don't even want to watch.
Yeah this is true.
This, and the sibilance in the voice is only getting worse. Each "s" is like nails on chalkboard, I can correct it on my EQ but it's annoying.
13 years to fully buy a house in NYC? That sounds a little low…
It’s a raw metric of income over cost - it’s useful as a comparative tool between cities, but he’s not suggesting that it would actually take the average person 13 years to buy a home. If you add in other parts of the equation like local interest rates and cost of living, it becomes a somewhat less useful tool in the scope of evaluating real estate costs
Average vs. median. Had they used the median income the figure would be a lot more realistic.
All of those statistics are something you cant take as hard fact because of the amount of variance in them. Does average salary include the people making >50 million a year who just happen to have an apartment there but dont actually live there? That pulls the number up. Does it include some of the satellite areas where property value is severely diminished compared to the best areas, and the high rises listed for several million for an apartment as part of the calculation? Without being able to look over the data its just a "give you a rough idea of the disparity" figure, which I appreciate and find appropriate to use but would not parrot as fact in other conversations.
Sure it's probably higher, but the point of the statisic in the video is to show how unaffordable major urban Chinese real estate is. New York City is expensive, but it isn't 40-45 years to buy a home expensive.
🤣🤣 the US con-my is COLLAPSING! people are realizing T bills, NYSE, real estate, and social security in the US is a HUGE PONZI PYRAMID con to enrich the 1%! Bernie Madoff...said the US con-my is the LARGEST PONZI!
2:51 I made it this far in the entire two minutes and 51 seconds I was waiting for the phrase “Now, it’s time to learn how money works”! I’m pretty sure because of the voice!
Do these guy use AI voices or is this a human?
@@WillieFungoits a human. You can see him compete in JetLag the Game. His name is sam and he also runs Half as Interesting
@@WillieFungo he’s human! So is the channel I’m talking about (How Money Works)! But I understand where you’re coming from!
he may have that channel too @@Dr_Larken
@@DontReadMyProfilePicture.273 ha jokes on you… Я не умею читать! Was jetzt Mein verzweifelter, Aufmerksamkeit suchen Freund
Those graphs were beautiful and extremely easy to understand. I just had to say that.
Thanks for showing all the info with the least bs, no clickbait, no shouting random pieces of info on the screen so as to force the viewer to take your words without trying to question you; while still making the video really engaging. This is why your channel is worth following.
No clickbait? This is THE clickbait. Every month this guy uploads a video saying how China is going to collapse
@vukbajic4904 the last time he uploaded a video about China was over a year ago, very easy to check
@@vukbajic4904 nah this channel is far from that chief Just search china collapse, you'll find other channels uploading that crap and barely having any bit of content in them. Its like the same kinda channels which keep having videos about stock market crashing when the index goes down by a whopping 2%. This channel is far from that.
@@vukbajic4904 I think you're confusing this channel with Business Basics.
Idk if it's clickbait but his analysis is extremely narrow. Chinese GDP growth started slowing a decade ago, way before evergrande folded. This video was just a rehash of the evergrande crisis which is hardly an unexplored topic, and it's not the main reason growth is slowing.
I love the videos but starting to find the background music distracting. It’s not the first time I’ve noticed that, but this time was the worse. It should not be nearly as loud as Sam’s voice
Background music clipping, very distracting.
@@salaciouscrumb agreed, I thought my headphones were broken until I read this comment
yea the main issue is something was messed up with this background music, not edited right and so was distracting
There's background music?
Wait, there's a voice there? I thought I've heard someone speaking, but I didn't understood anything... that music...
Controlled demolition is accurate
I'm not so sure about the controlled part, they are good at controlling the narrative but they can't hide everything and from what little leaks out, it's pretty doubtful that everything is going well behind their cracked facade.
🤣🤣 the US con-my is COLLAPSING! people are realizing T bills, NYSE, real estate, and social security in the US is a HUGE PONZI PYRAMID con to enrich the 1%!
All to prepare the population for a draft. Mark. My. Words.
It hasn't been demolished but they are preparing to burst the bubble at some point.
Why go to war against opponents better at ruining themselves than you? @@H33t3Speaks
The real estate investment craze was real. The Chinese were known to buy up and hoard apartments in Hong Kong where demand for housing is always strong with supply being limited due to land issues, causing the already insane real estate prices to go up even further and exacerbating the problem. A lot of these apartments weren't inhabited and everybody knew they're for investment. Adults learned of it first-hand and teenagers studied it and the related politics at school as housing is still one of the most pressing social issues in Hong Kong.
Was interested to find out why there meanwhile isn't so much talk about whether HK is facing the danger of a property bubble too that could lead to a financial crisis
@@lzh4950 What I can say is real estate prices have been falling because hundreds of thousands of wealthy citizens are leaving, so supply is up and demand is down at the moment. Real estate is surely unaffordable to many, but the demand is still real, so I think it's not as dire as what's described in the video. It helps that the Hong Kong market and the Chinese market are still somewhat segregated
Real life cryptocurrency and just as worthless in the end.
just fyi, multiple video clips (both archival and modern) you use in this video are of hong kong and not mainland china
Hong Kong is China now
I mean, the central government of China are doing their level best to economically and socially ruin Hong Kong too.
No one caress
@@matthewmelson1780 I do and the commenter does. 2 ≠ 0
why would that matter in the slightest? the b-roll is just there to give your eyes something to do while you listen to the narration.
Companies like Country Garden also have incomplete foreign development. If the domino starts to fall in China, it will drag South East Asia along with it. It may not hit as hard as China, but it will hurt.
It also betted big that Malaysia's Johor state's Iskandar region would become to neighbouring Singapore what Shenzhen, mainland China has become to HK, by reclaiming ~14km^2 of land to build Forest City to supposedly house 700000 people eventually, but looks like sales have stalled after both Malaysia & China changed their policies; the former to no longer grant PR automatically to foreign homebuyers, & the latter to make it harder for their citizens to bring money out of the country
You are one of the few reasons I still go on YT, really looking forward to your Rumble channel going live
I love your channel, you do a great job explaining things.
"Chinese residential spaces were as cramped as a kitchen in an American family home" Millenials living in Boston: "hey, like me!" "The Chinese paid 1-3% of their income in rent" Millenials living in Boston: ................
Boston avg home still much bigger and the income:rent ratio is still more favorable in BOS. But there are some similarities.
Maybe Gen Z. Millennials are mostly in their 30s and 40s now and the older cohort actually has some decent wealth accumulated.
@@Homer-OJ-Simpson Hong Kong u mean .
Good video. I heard they say China's economy slowed down in 2008, 2012, 2016 etc... yet they became a super power in front of my very eyes...
In 2008 it was growing at 9 percent. Now it's (officially) growing at 5 percent. And it's continuing to decrease. In a way that means you've lost the race to become rich before you grow old. That's literally the definition of slowing down.
The total population of all countries with GDP higher than China is only 1.2 billion people. At actual living standards, this population will decrease to only 800 million people. You don't need to trust all the economic data, you just need to trust the data that no one can question. In 2006, China's per capita GDP was $7000, and car sales exceeded 25 million. Since then, Chinese cars have maintained above this sales volume. In 2019, China had the largest tourism deficit of over 200 billion US dollars, which is more than the sum of the other top ten tourism countries. In 2019, Chinese people spent 60% more on overseas travel than Americans, and in 2018, they spent twice as much as Americans.
@@bobs_toys okay then, China’s economy is growing at a rate of 5 percent.
If possible, please address the music audio issues in videos. I've been noticing with newer videos that it's becoming louder than it was originally and that the quality of the music is also really bad. It has distortions and clipping making it more noticeable to the point it's becoming distracting from the topic being presented.
This is only part of the truth. Only in first and second-tier cities in China can housing prices be very high, and in small fourth and fifth-tier cities, you can buy a house for only 100000 yuan. The decline in housing prices is beneficial to the lives of ordinary people
3:30 this can be said of a lot of the world, here in the UK you can have a company own the frehoold of several 100 acres, they then sell the leasehold to a housing developer, who, once built, can lease it out to a management company, but also lease on 100 years more/or less individual plots to the public. In London you can often go 3 or 4 leases before you get through the entire chain.
And in England (Scotland has a different system), freehold means you are granted an indefinite right to occupy by the King. So it is basically the same as China. In Scotland, you actually own the land, but there is no practical difference.
not the same, wu mao
Way better than any "China is Over" video
Trying to predict China's economic collapse has become the new predicting the end of the world 😂
The thumbnail is still western Propaganda lol "crisis"
@@shinchan-F-urmom Welp clicks need to be generated somehow to get that ad revenue /shrug
because they said it two decades ago and that did not happen, so they say "more time will tell"
Well I’m not sure what you guys are watching but the economic collapse is kinda happening in real time now. At the timescale of the rise and fall of nations, I’d say the predictions weren’t too far off.
This is the best historical explainer I've seen so far. I think most of us in the West know about China's "meteoric rise" but only in the abstract. I didn't realize how recently most of this happened and to what degree. It's stunning. It also helps explains why Western economies around the world followed China's lead - and "investor" greed - unfortunately believing that unrestrained property development would only ever increase in value without factoring in the vulgar debt-bubbles created by it and eventually negatively affecting the entire economy.
In a nutshell, China is not the great rising superpower that we have been deceived to believe. In truth, China is a nation that is about to completely fail. Their entire financial system was built off hyper debt they knew they couldn't pay off; their economy is powered by imports containing resources that China's geography doesn't have--resources that are only possible to obtain because of the Order; and China is suffering a terminal demographic collapse. Now that the Order is collapsing, oceanic free trade is soon coming to an end, and China has no real navy to protect themselves from what's coming next--nor will they be able to bring in enough imports to maintain their current population or make enough adults in time to keep the ceiling held up as they ran out of adults years ago. They're done. A massive famine is coming. And many are not going to make it.
In a nutshell, China is not the great rising superpower that we have been deceived to believe. In truth, China is nation that is about to completely fail. Their entire financial system was built off hyper debt they knew they couldn't pay off; their economy is powered by imports containing resources that China's geography doesn't have--resources that are only possible to obtain because of the Order; and China is suffering a terminal demographic collapse. Now that the Order is collapsing, oceanic free trade is soon coming to an end, and China has no real navy to protect themselves from what's coming next--nor will they be able to bring in enough imports to maintain their current population or make enough adults in time to keep the ceiling held up as they ran out of adults years ago. They're done. A massive famine is coming. And many are not going to make it.
In a nutshell, China is not the great rising superpower that we have been deceived to believe. In truth, China is nation that is about to completely fail. Their entire financial system was built off hyper debt they knew they couldn't pay off; their economy is powered by imports containing resources that China's geography doesn't have--resources that are only possible to obtain because of the Order; and China is suffering a terminal demographic fail. Now that the Order is collapsing, oceanic free trade is soon coming to an end, and China has no real navy to protect themselves from what's coming next--nor will they be able to bring in enough imports to maintain their current population or make enough adults in time to keep the ceiling held up as they ran out of adults years ago. They're done. A massive famine is coming. And many are not going to make it.
when ever the traffic in the stock footage changes to the other side of the road, that's footage from a different country, HongKong or even Taiwan. places separate and distinct from china (at least until 97). if you see kodak signs your in HongKong, if every car is suddenly a subaru leone your in Taiwan.
Cool story.
Don't care
视频上是二十年前的中国，滤镜也用的那么旧
I noticed 😂
I love the "finally" in the title. As if to say "It's about @#&*ing time China! Why you gotta scare us like that?!"
I think it's more of a "we've been seeing China collapse for 4 years now, are you finally going to admit it China?" lol
@@marw9541 actually China have been collapsing for 20 years or 40 year even 70 years... and it have been collapsing to No.2 economy in the world... if not No.1 by PPP measurement.
@@yuey0602 ahhh, someone that has their head in the sand 😊 have a nice day, I can't educate people like you unfortunately
@@marw9541 👍👍👍
@@marw9541 4 years? Gordan Chang has been predicting the collapse of China for 30 years now 😂😂😂
Edit: I am misinformed about this; my impression apparently didn’t take into account post COVID shifts. Leaving my original post because I said what I said, but I appreciate people correcting me because I’m still interested in the topic ----- As the video alludes to, the property bubble problem is happening, perhaps on a smaller scale, in large cities across the western world. I would be genuinely interested in a video covering that as well. Manhattan development is currently full of enormous sterile condo buildings with hardly any permanent occupants
those are just airbnbs 😅
Not really, the property issue in the western world is actually the exact opposite of China's. Most european capitals have had housing issues since the 80s-90s and the end of state controlled construction companies. The market in China has a very high supply, the supply in europe is almost non existent. People who would sell dont because they'd lose money since people can't afford higher prices due to interest rates, so the market are extremely stagnant, prices dont go down while they should & housing (whether rent or property) is real issue for more and more people.
Property crisis in America: not enough houses. The exact opposite of China
this is true, but at least there it was caused by covid-19 forcing businesses all at once to finally get on with WFH and the land could be reused to build residential buildings which are in demand. a new york state law allowing dense housing without parking minimums on any plot zoned for offices would help a lot
@@sairenrysten9795 In the US, and i think candada, its a mix of both. There simply isnt enough supply and most of what is getting built is either earmarked to large investors or gets gobbled up by large real estate companies. to make matters worse is that they will idle some properties, deliberately keeping them vacant, to boost demand (and therefore price) of their other properties. The annoying thing is that these idle properties are technically still on the market and accepting applications. Its just that none ever get approved yet the people applying still have to pay the application fee which can range 40-100 USD each. This basically enables them to offset the cost of leaving it vacant and accureing property taxes.
My uncles in China were given some money from the government for house renovations in their rural seaside village. The shops, parks, and facilities there were greatly improved as well. I'm guessing they want to make the villages look more attractive for domestic tourism and for city folk to consider moving into them, to spread out the dense population centers.
I doubt they'd want to spread out the dense population centres, major cities are more economically successful. Probably they just want to promote domestic tourism to keep money inside the country. The only real reason they'd have to try and move population centres are for water resources and to have non-port cities.
10:25 the first two rules is a crazy benchmark on how much risk there was lol
So what I'm getting from this is Polymatter face reveal on next season of Jet Lag!?
Nah, it's been revealed Toby is coming back next season.
What is going on with the background music? It’s almost constantly clipping and distorted even though the volume is low.
The music choice in this video is crazy! Definitely set a unique tone.
Very good analysis. Subscribed!
Thank you for this, it's refreshing to find a non-clickbaity, non catastrophising take on the topic (and thank you too for not screaming in the thumbnail!)
7:53 I'm interested if in those "Years to afford a home" the average income is after taxes? Also those years are years with no other cost(living expenses etc.) other than payment for the apartment/house?
Very interesting and very well presented.
America and countries in Europe have experienced similar situations, when manufacturers of shoes, clothes, home appliances, etc., flocked out of those countries. Korea and Japan have also experienced the same thing. But the situation did not make these countries experience an economic crisis or bankruptcy. Why? Because it is a matter of competitive advantage, comparative advantage, and a matter of ordinary market mechanisms. If it is now starting to happen in China, it is indeed time for China to experience a similar transition after years of mass low-wage labor-based industries. When China starts producing airplanes, electric cars, superconductors, etc. it is just a necessity for a country that has entered the "advanced" level. Selling 1 airplane is worth more than selling thousands of shoes from a dozen shoe factories in the Ningbo area. That's also why America can still able to compete with China in term of GDP etc, even though the low-labor manufacturing industry left America many years ago.
Its gonna have some significant implications, especially for global markets
Greatings from the Uruguay, Yeah, I've been following the news. China's economy has been a powerhouse for so long, so any signs of slowdown could ripple through the global economy.
That's concerning, especially for those of us who have investments tied to China or rely on Chinese imports and exports for business.
Exactly. It might be a good idea to reassess our investment portfolios and see if there are any adjustments we need to make in light of these developments.
Agreed. It might also be worth considering seeking advice from a financial advisory firm.
Do you happen to work with any, that is very reliable
Informative. Thank you
This was beautifully narrated - Kudos!!!
I wish the music on Wendover videos was much quieter. It feels too foregrounded and I dislike feeling like my emotional response to nonfiction content is being led by a soundtrack.
Ah, finally the "two more weeks" video you'd eventually needed to do.
So, this time Wendover drew the short straw. Well, someone had to tell us “bad China collapse now”.
China has been collapsing since 1970s lol
I love you, Disembodied Voice. Thank you and the team.
That was a really great video, thank you for the insight!
Hong Kong footage
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
In fact, I had no prior experience or understanding when I began investing in 2020, but by the end of 2023, I had made a profit of almost $850k. All I had been doing was going by what my financial advisor had told me. This demonstrates that all you truly need is a professional to assist you; you don't even need to be a great investor or put in a lot of work.
@@emmaarmandowho is your advisor please, if you don't mind me asking?
"Gertrude Margaret Quinto" is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment
Why is Country Garden not on your list of top 10 real estate developers?
Very interesting topic. I knew there was a housing crisis of sorts but didn't really understand it before this. The music throughout sounds distorted to me and is distracting because of it. Not sure if that's just me but I heard it on my phone and my computer.
At the very beginning of your description of how the selling/borrowing system worked, my very first thought was "So who's checking for the property sales slowing down, and how will they even stop the debt spiral in this financial pyramid-esque building scheme?" The answer is: no one. No one will check or try to stop this obviously incredibly flawed system. I almost wonder if it was allowed to happen to some degree, knowing that nameless, faceless, powerless people will take the brunt of the damage when the inevitable end of the line finally comes.
Probably. That’s definitely how it happens in the US/Europe.
10/10 video absolute banger as always top 3 favorite yt channels.
I would be interested to see where Canada lands on that house price:GDP graph.
Down at the bottom
Probably pretty rough. Canada housing prices to per capita GDP is depressing, it’s even worse than California.
Vancouver was in the charts
Great content as usual. One small (constructive) criticism: I found the background music to be a little too loud or rather distracting in this one. Would have preferred something more subdued.
Thank you. I have heard so much about China's real estate bubble over the past few years, but didn't really understand why it was so big. This was much better than in the news.
Superb quality! Well structured and informative.
Feels like the background music is a store brand Interstellar soundtrack.
Good summary of the economic side of things, but could use a footnote somewhere about how this boom also fueled "tofu dregs" projects which accelerated the decrease in home buying as those risks became more well known.
"Might not get it back"😂 More like "almost certainly won't get it back" Even a loan from a trusted lender like the Fed has a risk of default so you might not get it back. That's what "might" implies, possible but unlikely.
Building apartments on a former pesticide plant. What could possibly go wrong?
Spain had a similar issue
I agree. Spain had a economic boom with construction
Spain is just old and the pensioners will be a burden to the youth
@@dennisestradda9746they should consider MAiD
You never went into just why the Chinese central government specifically went after the housing sector, which is kind of pivotal to the entire video. A house is a home, not an asset to generate income. Not just to the situation in China either, but speculative house buying as assets that are effecting cities and countries world wide.
Slowing down feels like an understatement looking at the ripple effect Evergrande will still have
China has been collapsing since 2000 according to Americans😂😂😂
haha yes it make me think of the videos and commeners like 'The Decadent west is collapsing (for real this time!) ( not clickbait/not a prank) (dermatologists don't want you to know this!)'
Another Great Video!!!
This is anti China propaganda
Finally someone who understands macroeconomics Of the supply demand cycle coupled with liquidity requirements
As a Chinese, I can say that you are right in the end of video that economic prosperity is the foundation of CCP’s ruling. But ur narrative about the bubble is a bit simplistic.
This is a good thing for China. China's growth was so unsustainable and Xi Jinping knew it. Leaving the property bubble to grow continuously would result in far more catastrophic consequences than what we are seeing. Shanghai and Beijing have crazily unaffordable housing, leaving young people completely priced out the market. "Controlled demolition" is the best way to describe it, Wendover hit the nail on the head. Whatever is on the other end is unknown, but Xi Jinping has taken the painful yet necessary route to pop and deflate the Chinese property bubble.
"a good thing" as in terrible mistakes left to keep getting worse but finally something is being done to address it? All while Xi's policies on other matters that effect housing have worsened the problem? I agree it needed to be deflated but the issue gets much worse with Xi driving down the economy with many of his policies so now there will be a hit on the housing market at the same time the economic growth is shrinking relatively fast.
I doubt it is controlled
@@neodym5809 it might not be preferred or planned, but the CCP has its hands on more levers of control than any other economy. They can even make billionaires behave!
@@neodym5809 Well house prices aren't falling that much and the bubble isn't being reinflated, so your doubts are incorrect.
@@Homer-OJ-Simpson They haven't worsened the problem. By deflating the property bubble, he's making it better in the long run. Chillax pal, economics isn't for everyone. There are other hobbies out there. Croquet seems popular for folk your age?
The background music seems really distorted in this video. Makes it hard to focus on what's being said at times. :/
i dont understand the epic music in the background, turns the information presented into a motivational speech
We're motivated China won't be the #1 country in the world.
Fascinating and educational video, thank you!
I wasn't financial free until my 40’s and I’m still in my 40’s, bought my third house already, earn on a monthly through passive income, and got 4 out of 5 goals, just hope it encourages someone's that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made.
yeah investment is the key to sustaining your financial longevity but venturing into any legitimate Investment without a proper guidance of an expert can lead to a great loss too
wanted to trade, but I got discouraged with the market price fluctuations
Can you recommend a guide for me?
Hello, I’m 56 and I am not worth much yet , please help me out. Bought my first house last month and I can't seem to make any other smart investment.
Haven't you heard of Expert Chrissy Barymoer ?He gives excellent guide on the right stock with high dividend
Economic investigator Frank G Melbourne Australia is following this very informative content cheers Frank 😊
Seeing the apartment I grew up in before I moved to the suburbs on a yt video is so cool
Thank you for this video, it is to date, the most informative on the reason of China's housing crises that I have seen. Keep up the great work
Oh yeah, just so you now the Financial Times just reported that Chinese economy grew 5.3% this quarter, exceeding expectations
excellent production again
No matter how dire the situation or damming the evidence. Wendover will never openly criticize China. That's the real power of the market. A substantial amount of clicks and views must come from that region.
An actual good video on this topic. Most people are quick to say "China is collapsing" or whatever, but thats just not whats happening. A "Controlled Demolition" like you mentioned explains this perfectly.
❤Precisely well said
No, that's exactly what's happening and calling it a "controlled demolition" makes me wonder how in the world you define "controlled". China's economy is absolutely collapsing.
Another 5% banger 😂 make a video comparing US UK GER now
Compare income per capita😂
@@brotherbig4651 might as well compare cost of living and social safety nets too!
home prices are not according to per capita of the country, it is based on how dense your city is (that creates high demand), while the people per square kilometer in China seem not very dense but most of the Chinese live in the coastal areas.
As a side effect, since bought up so much of the world's supply of cement, and other materials, housing development is going to cost more globally as well. There's no such thing as a "market crash" of cement.
What about the building's quality ? I saw some posts about buildings beeing rushed and therefore, crumbling very easily, is it a part of it ?
some buildings yes. when they're not even expected to be sold/occupied. certainly not all or even most buildings.
There are buildings failing but that’s not representative of the average quality over there. 1. You should always remember how big china vs how many buildings/projects actually failed. 2. Theoretically china has the strictest regulations on civil engineering. It was jaw dropping to hear that engineers and project managers are held accountable for the lifetime of a building/project, meaning that should it failed prematurely or unexpectedly, personnel’s overseeing the project will go to jail. That said, you will likely hear more of the building failure because 1. In a highly competitive market like china, outsourcing the project to subcontractors are common, sometimes that causes problems because of cost cutting. 2. Most importantly, strict regulations are only installed in recent decades, questionable engineering practices were very common back in the days.
When the per capita income reached US$15,000, almost every country slowed down its pace of development because the economic base was already very large.
Middle income trap
@@dontcomply3976 Thier PPP is 22.000
Didn't China hater said it was like $5000 or something? When that was reached the number became 10,000, when that was reached the new number now is 15000? Let me guess when 15000 is reached the new number will be 20000?
4:15 - - top 10 largest real estate companies
Not sure if you're already aware, but the background music is quite distorted. Sounds like it is clipping.
"Houses are for living in not for speculation" - Xi Jinping
Surprised he didn't mention this key point.
The problem is that the average Chinese don`t have any safe investments they can invest in to make their money grow. Even a bank account may not be risk free. Is this comment by Xi leveled at the local governments,banks and developers who made it happen in the first place? Or is it Xi`s way of telling the people to spend their money some other way.
As shady as the CCP can get, what they did here with the housing bubble seems to make a lot of sense.
@@Corredor1230except that it needed to be done 10 to 15 years ago. Instead, the CCP spent that time getting its shills to say that there was no problem, and everything was just western propaganda. Just like they did with the one child policy.
@@Corredor1230 Yup, they HAD To pop the bubble. It was either they do this kind of hard landing or a total crash years down the line.
Anyone else waiting for Wendover's take on the current Boeing crisis?
Already done a video on it
18:00 Only recalcitrant developers and speculators suffer huge losses. Home buyers benefited from huge discounted prices and the secondary market grew significantly.
Happy to see it
I'd be really interested to see if the CCP would try to renationalize housing again. They have all the supply they need and with a shrinking population they probably wouldn't need any more housing, just a predictable and steady maintenance and replacement of certain projects. Nationalization could be extremely successful in these conditions as the party doesn't usually doesn't make these short term irresponsible decisions that private companies do.
I think that it would be the best course of action. They let capitalism do it's thing and now it's time to maintain.
But why? You assume that they will want to nationalize everything again at the first opportunity just because they are communists? But why? The proof that this assumption is wrong is obvious. You only need to ask, who privatized it in the first place.
The land is already nationalised and has never been un-nationalised.
Its indeed one way. They can also create new regulations and requirements for housing as well. Enforce longer term planning and guarantees. There is a famous ghost town that's full of mansions. Such a waste.
The homes are falling apart because they where built like crap and where built in the wrong areas. There is little they can salvage
The crazy thing is that we KNOW how all this happens because it’s occurred again and again throughout history all over the world. And yet it happens again and everyone’s shocked and astounded.
here is my perception, the federal Reserve has raised interest rates to 5.5%, dollars mostly flowed back to the US bank which means foreign capital has left the country, that led to there're not enough dollars in the global market right now, for all the countries except US their currencies are facing the stress of depreciation againt the dollar, asset prices are shrinking, specific to China, their real estate prices and the stock market are falling down significantly due to the lack of investments, so now we see not just China but almost every other country's economy except US are slowing down, and to be honest the US are facing an even bigger problem which is debts, but this's another thing.
What is the purpose of using video sources 30 years ago?
About 1980s
Oh it's slowing down? I thought it crashed like a year ago and they began living in post-apocalyptic conditions by now.
The real estate sector has crashed, not the whole economy ❤
@@atharvatar Alright thanks maybe we'll see the results of these catastrophies soon enough
@@ZaklnGritch we are seeing the results already since the gdp growth rate has slowed to 5% and the FDI had turned negative in the third quarter of FY 2023. Otherwise the country is going to be functioning normally and its not gonna break apart
@@atharvatar I thought it would destroy the country honestly but thank you kindly for all the information you've provided
@@ZaklnGritch Why did you think it was going to destroy the country? Because some CIA-funded youtube channels told you so time after time?
Would you ever do a video on Aircraft maintenance?
In a lot of cases where new cities have been built, the local farmers have been forced off their land so the apartment blocks could be built and then promised jobs and accommodation once the construction has been completed. However, there are no jobs suitable for the farmers in the new cities, and the rent for their shiny new apartment is way more than they can afford so they can't live there. One other major issue with all these millions of empty apartments is that the quality of construction and of the materials used is absolutely dreadful, so that in less than five years the buildings are literally falling apart. It won't be long before we start to see partial or even total collapses of some of these apartment blocks.