wow !! What is that ? Agenda 21 ? Wow
The ghost towns of China: Amazing satellite images show empty cities
- Thread starter Brian Foley
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wow !! What is that ? Agenda 21 ? Wow
China is/was burning so much coal that severe shortages have begun,further coal imports are getting increasingly expensive.This scenario is forcing China to shut down Coal plants and replacing em with Renewable energies.China has implemented a plan for at least 75 GW of wind and solar to be installed by 2015.Good news for renewables!
http://tinyurl.com/3kz83kb
http://tinyurl.com/3kz83kb
I find myself rather in accord with your summary. Given the population in comparison to it's land base, the Chinese have managed to position themselves quite well in the current global fiscal dynamics, IMO. They have been investing in resources even in my territory, and mineral prices are soaring.
They are buying into mining opportunities in the Yukon, of various minerals.
Some in Canada, but more than 100 billion dollars in Venezuela’s heavy oil field (which is larger than Canada's), not counting the two new large heavy oil refineries China is building there.
This is less than half the dismal facts at: http://www.sciforums.com/showpost.php?p=2803358&postcount=163 With congress split, and as usually thinking mainly of wht helps their re-election prospects – gaining seats in congress etc. Don’t expect the long term investments that China routinely makes in infrastructure to happen in the US, even when the need is obvious and very critical.
Real "shovel ready" but government dead.
“… the longer Keystone XL doesn’t get built, the more and more likely becomes the construction of at least one and likely several pipeline proposals to the British Columbia coast. The US Dept of Energy (DoE) concluded that these pipelines to BC would open the Canadian oil sands to Asian markets and result in a substantial increase in US reliance on oil sourced from unstable and/or hostile Middle Eastern and African regimes. ...
Billy T comment: Not only that, but when Chavz cuts off the heavy crude now sent the several gulf state refineries, which were built to process it, the US dependency on Mid Eastern & West African oil will grow. Read more on this here: http://www.sciforums.com/showpost.php?p=2667151&postcount=62
and for China’s role in leaving the US “high and dry”, oil wise, read last half of post here: http://www.sciforums.com/showpost.php?p=2742509&postcount=395...
For more details on their massive clean energy efforts see:
http://www.sciforums.com/showpost.php?p=2797057&postcount=157
Where you will learn China is soon to finish a wind farm 25 times larger than any in the US (or even planned). It is already 6 times larger than any in the US. They are developing and installing "super-critical" coal fired electric generation plants which get nearly 50% more KWH from each ton of coal. China is the clear leader in "go green" but starting from a very dirty history - just as bad as the US had when it was at the same stage of industrialization. - I.e. back when Pittsburg PA was "the steel capital of the world."
For more on China's "go west" interior development program see: http://www.sciforums.com/showpost.php?p=2808655&postcount=443
It's not that they can't use the houses, as such, but that they're in a speculative housing bubble, and the value of the houses (in the long run) will end up less than the loans taken out to construct them. This clogs up the banking sector with a ton of non-perfoming loans, just like we've seen in the USA.
There's no way to dedicate 50% of your GDP to investment, without creating a glut of overcapacity and bad loans. It's simply unsustainable.
I agree it is unsustainable. That is true of a petroleum based economy and many other things too. But that does not mean it can not continue for decade or two more.
China is taking drastic measures to control /limit its growing: raising bank required reserves nearly every month for the last year, and several other measures. I.e. they have no illusion that double digit GDP growth will be sustainable - have cut it to about 9% in 2011 with 8% expected for 2012, etc. China is getting real, productive assets for that 50% of GDP investments. In contrast the US is not making enough of its GDP go into real productive investments (2/3 a "consumer economy," etc.) In fact not even investing enough to keep its infrastructure in good state of repair.
You worry about China, if you like, but I'm worrying about the US.
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Really hope they cancel the (new)pipeline to Texas soon and start the one to B.C. Canada needs to sell to more than just the U.S. Then at least one industry wouldn't care when the U.S fucks up it's economy again. Truth is we don't need to sell crude to the U.S. Edmonton probably has enough refinery capacity to make enough finished product for 80% of North America. That is a lot more profitable. You guys can come pick it up in a fucking truck.
A recent report by McKinsey Global Institute tells:
"In 20 years, China’s cities will have added 350 million people — more than the entire population of the United States today.” {Billy T has called this "the greatest and most rapid urbanization in human history" in many posts. It is possibly the most important social/economic event in many hundreds of years.}
"By 2025, China will have 221 cities more than one million inhabitants — compared with 35 in Europe today — and 24 cities with more than five million people."
“By 2030 1 billion people will live in China’s cities… 170 mass-transit systems could be built… 40 billion of square meters of floor space will be built in five million buildings—50,000 of which could be skyscrapers.
HAPPENING IN 22 YEARS… Source: McKinsey Global Institute, Preparing for China’s Global Billion
In other words, as China transforms itself from a nation of farmers to a nation of urban dwellers, the equivalent of 10 New York cities will need to be built, and in doing so richly reward U.S. investors who invest now.
Truth is, China will continue to grow…
Despite rising U.S unemployment
Despite the falling dollar, and
Despite the collapse in the U.S. housing market
{Billy T would add (and often has in prior posts): Despite GWB's depression in US and EU.}
The economy is growing like a weed. Its standard of living is on the rise. And its people now have the means to not only lift themselves from a dirt-poor, country existence, but to one of a much richer lifestyle, filled with cell phones, big screen TVs, and cars—the same things we American’s take for granted. ..."
{Except for BT's comments inserted in these brackets} Quote is from: Today's Email to me from RobertHsu@investorplace.com
but this is exactly what I have been posting, predicting, at several threads for 5 or more years. Hsu is an ethnic Chinese, but US citizen, who visits China several times each year, often with a larger group of very rich investors in tow during his inspections of many cites and factories - He knows of what he speaks.
"In 20 years, China’s cities will have added 350 million people — more than the entire population of the United States today.” {Billy T has called this "the greatest and most rapid urbanization in human history" in many posts. It is possibly the most important social/economic event in many hundreds of years.}
"By 2025, China will have 221 cities more than one million inhabitants — compared with 35 in Europe today — and 24 cities with more than five million people."
“By 2030 1 billion people will live in China’s cities… 170 mass-transit systems could be built… 40 billion of square meters of floor space will be built in five million buildings—50,000 of which could be skyscrapers.
HAPPENING IN 22 YEARS… Source: McKinsey Global Institute, Preparing for China’s Global Billion
In other words, as China transforms itself from a nation of farmers to a nation of urban dwellers, the equivalent of 10 New York cities will need to be built, and in doing so richly reward U.S. investors who invest now.
Truth is, China will continue to grow…
Despite rising U.S unemployment
Despite the falling dollar, and
Despite the collapse in the U.S. housing market
{Billy T would add (and often has in prior posts): Despite GWB's depression in US and EU.}
The economy is growing like a weed. Its standard of living is on the rise. And its people now have the means to not only lift themselves from a dirt-poor, country existence, but to one of a much richer lifestyle, filled with cell phones, big screen TVs, and cars—the same things we American’s take for granted. ..."
{Except for BT's comments inserted in these brackets} Quote is from: Today's Email to me from RobertHsu@investorplace.com
but this is exactly what I have been posting, predicting, at several threads for 5 or more years. Hsu is an ethnic Chinese, but US citizen, who visits China several times each year, often with a larger group of very rich investors in tow during his inspections of many cites and factories - He knows of what he speaks.
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I'm going to go out on a limb and say that there is no possible way that China's levels of investment spending can continue for anything like "decades." They need to course-correct dramatically, right now, or they will face a serious banking/finance meltdown within a few years. They've already done this for decades, and now are doubling down just when they should have been backing away from the strategy.
No, they aren't. You can't possibly hope to invest that high a percentage of GDP that quickly and not end up building a bunch of bridges to nowhere, empty condo developments, etc. Especially considering all of the endemic corruption in China. Which is exactly what happened - see thread title.
You shouldn't let the GDP figures confuse you - the USA spends slightly more dollars each year on investment than China does. US infrastructure is in perfectly fine shape.
They ARE cutting GDP growth by about 1% per year in 2011 & 2012 mainly by this approach:
“… China's annual inflation pulled back to 6.2 percent in August from July's three-year high, … Since last October, the central bank has raised interest rates five times and increased bank reserve requirement ratios - the percentage of cash deposits they must set aside in their vaults - nine times. …" Today from: http://usa.chinadaily.com.cn/business/2011-10/13/content_13882892.htm
There are two charges here.
On first: Yes China will build a lot of infrastructure that may not be used for years, but more than 100 million Chinese, former farmers, will move to the cities in this decade. Most of it will be needed in a few years at most.
When I lived near Columbia MD, the bridge on MD route 108, a two lane road, was replaced with a nice modern one. Just beside it a second identical bridge was also build for some distant point in time when 108 would have four lanes.
Ten years later when I moved way, the second bridge never had had even a bicycle cross it – tall grass and small trees were growing at both ends of bridge 2. I assume, 25 years later, 108 is four lanes and Bridge 2 is in use. To build bridge 2, later, just before the need, may have been more costly than what was prematurely spent on bridge 2 + the interest lost on the stagnant funds tied up in Bridge 2 – I don’t know. Perhaps the economy of building two at the same time (and the relatively low interest rates) saved money? – I don’t know.
I do know it would be a social disaster for China if there were only accommodations for 70 when 100 million have left their farms. Already housing is in very short supply in most Chinese cities –rents and new home prices are sky-rocketing up. Many unrelated people live in same two rooms with bath at the end of the hall for a dozen others.* Most factories have dorms for their employees – part of the pay. Thus, I am confident the new cities will be occupied etc. before too many years pass (certainly more rapidly than bridge 2 of route 108 saw any use.)
Chinese are rapidly growing wealthier with their salaries growing in real value (inflation adjusted) about 10% per year. Better food, then better housing, then a car for the old bike will be the order they spend on, I think.
When country is urbanizing much faster and on a much greater scale than any other in human history, yes, there will be whole cities with little use for a few years.
On Corruption: Yes it is bad in China - has been for several thousand years. People "well connected" get millions in unearned funds - almost as much as well connected bankers in US get as bonuses, stock options, etc. even as their bank is being bailed out by the tax payers. In both cases it is a way for the government to stimulate the economy ("printing" new money and giving it out to the "undeserving rich" in both countries.), but of course it would make dozens of times more stimulation if the funds were just dropped from Ben's helicopter over poor neighborhoods than given to the already very wealthy in either country.
No it is not:
U.S. Infrastructure Is in Dire Straits, Report Says
“ …More than a quarter of the nation’s bridges are structurally deficient or functionally obsolete. Leaky pipes lose an estimated seven billion gallons of clean drinking water every day. And aging sewage systems send billions of gallons of untreated wastewater cascading into the nation’s waterways each year.
These are among the findings of a report to be released Wednesday by the American Society of Civil Engineers, which assigned an overall D grade to the nation’s infrastructure and estimated that it would take a $2.2 trillion investment from all levels of government over the next five years to bring it into a state of good repair. …
From: http://www.nytimes.com/2009/01/28/us/politics/28projects.html”
I admit the ASCE may have a bias - perhaps the US infrastructure could be put into acceptable shape for only a trillion dollars.
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* China Daily recently had headline one had to open article to read about it. It was something like: "Hundreds had naked weddings this week end." Traditionally silly mounts of money (a few year's income) are spent on weddings. This with the rising cost of housing has made it necessary for most to delay marriage or live with parents for years.
Some moderns have started to say to hell with tradition - the licence is only a dozen Yuan or so. We'll marry without all that expense so we can at least rent room of our own - they call that a "naked wedding" (at least when translated into English).
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TIME had a peace about China this week regarding their utterly massive housing bubble. Apparently the largest in history. If I remember correctly, I thought it said house prices have doubled 5 times in as many years. Large swaths of cities sit unattended with no occupants.
I imagine many of these cities will begin to deteriorate and have to be torn down.
China has invested massively into factories to make cheap shit, shit that can be made even more cheaply elsewhere. They've kept the breakneck pace by maintaining a massive housing bubble. Will it hold? I really don't know. When shit sours, it sours fast. My feeling is, the party will keep the punch bowl at the table until at least 2012, when the new congress starts. After then (if they last that long), who knows.
I imagine many of these cities will begin to deteriorate and have to be torn down.
China has invested massively into factories to make cheap shit, shit that can be made even more cheaply elsewhere. They've kept the breakneck pace by maintaining a massive housing bubble. Will it hold? I really don't know. When shit sours, it sours fast. My feeling is, the party will keep the punch bowl at the table until at least 2012, when the new congress starts. After then (if they last that long), who knows.
If it is a "bubble" or not depends upon how "bubble" is defined. Generally most understand bubble to be rapid rise in prices driven by speculative demand with NO REAL NEED for the item of the bubble.
China is in the process, which will last about a decade or slightly less, of relocating a mass of people greater than half the entire US population. For three or more decades, the interior of China was mainly very marginal family farms and along the East coast factories with poorly paid workers making products for export, mainly to US & EU. China's leaders realized this was not stable path into the "glorious future." (The US & EU were living far beyond their means, with China's loans being a major reason why they could.) Thus, they started to develop the interior. (Actually this story is much like Brazil's: The new capital, Brazilia, was literally carved out of the jungle deep in Brazil's interior.)
With construction jobs available in the interior, the flow of farmer's children to the East to become exploited workers in the coastal city began to decrease. At its peak it was more than one million per month! For the last two years there has been a serious labor shortage in the coastal factories. Foxcomm not only improved the food in the company lunch halls, the dorms the workers sleep in, the working conditions, but also raised salaries by 30% in one year. None the less fewer Chinese came East to work in the coastal cities. So Foxcomm closed two of its coastal cites and relocated them to the interior. Many new or expanding old interior cities are growing more than 20% per year as China builds a modern, non-agricultural, economy in the interior.
Given the closing of factory dorms, the fact that most of the housing in the coastal areas would not even come up to US "slum standards" (Many unrelated people sharing two rooms* with toilet / shower at end of the hall for a dozen others to use, etc.) As this flow of people from the coastal area to the interior increases the new cities, not now occupied will be needed.
Also very important is the change in land laws. A little more than two years ago, the farmers (who never owned the land they farmed - the state does, still) were allowed to lease their right to use it to large corporations with tractors etc. At least 100 million former farmers are becoming urbanites as a result of this legal change. With a job in the city and their farm rent money they are a significant part of why China's domestic market is claiming a rapidly growing part of the GDP.
The Chinese are very "family connected." They don't want to live far from where their ancestors are buried.** They know now, with internet, that it is possible to have your own room etc. and in the new cities they will. Thus to come to the point, the Chinese housing boom is NOT a bubble. By above definition of "bubble." I.e. there is real demand for much more and much better housing, which the increasingly richer Chinese can soon afford. It is true that much of the increase in rents and home prices has been driven by speculators. They can see this real demand would drive the prices up, so they have bought now, hoping to profit by re-sales later. This is coming to an end now. In some areas the price of housing is slightly decreasing. Getting loans to speculatively buy is increasingly harder. (Impossible from banks now, but bank interest paid on deposits is less than inflation so many with money, form unofficial pools of funds to make private loans still. - I forget the Chinese name for these "pools of funds")
What basically has happened is that the speculators made the price of housing that would exist a few years from now, occur now. Even with this acceleration, the price per square meter is significantly less that in the US. You (and Time) can not just look at the rapid rise of home prices and ignore the real needs / demand and fact it is cheap compared to US and say: "China has a housing bubble."
* Sleeping with many total strangers is a long standing part of China's history. All most all of the hotels for travelers in the interior do not have rooms. Instead, especially in North China where it get very cold in winter, there is a large tile platform elevated about a meter that all sleep on with their blankets. Hot combustion gases from a fire flow under this tile platform in winter. Many of the factory dorm rooms have six bunks in each small room. Especially women from the interior (where whole family slept in one room) do not feel secure unless they have others sleeping near them. With the internet and increasing wealth this cultural heritage is changing. The young now want a room of the own (or with a friend, or better a spouse) in a nice new secure modern high rise apartment building. To get that "naked weddings," another break with tradition, are growing more numerous - see footnote of post 35.
** When I worked at JUH/APL three offices down the hall from mine, was Dr. Chin's office. He had modest international fame as a recognized expert in combustion chemistry. He was retiring and I went to his "retirement lunch." There he explained why he was returning to China. He had long had offers to return as head of a chemistry department etc. and now had accepted one near where he was born. In part he wanted to help China grow by teaching in university there; but also he wanted to be buried near his ancestors, he said. This from a Ph.D. and long time resident of the US.
SUMMARY: If you want to know about China, read China Daily as I do every day, not Time Magazine but filter out their towing of the party line (except to know what it is). (For example during the last month or so there have been articles telling how the Yuan is not undervalued, that the US's trade deficits are the US's fault, that the US Congress will start a trade war which hurts everyone, especially Americans paying more, etc. almost every day.) It may sound very immodest but just reading my posts in the China related threads will give you a more accurate view of China than Time. I do not need to tell a story the US public wants to hear as Time does to sell its magazines. When I error, Quad will usually correct me.
PS “… US produces far less steel than China in a given month--8 million metric tons versus almost 60 million metric tons …” From: http://www.investingdaily.com/ems/1...gx=d.kac,stid.12553,sid.250664,lid.6,mid.5840
Billy T comment: China also imports a lot of steel – steel usage is good index of growth, probably better than copper. – used in everything from cars, to high-rise apartments, to railroads, to wind machine and power line towers, etc.
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I suppose we'll just have to wait and see. I've been in China and definitely there's a very (or was a) positive forward-looking buzz. BUT, Chinese are in no way any different than anyone else and if anything, maybe even a little TOO Capitalistic minded. My friends' mother asked him for his overseas bank account, she then withdraw all of his savings (about 70K), without telling him, then bought 3 houses. He was pretty pissed off (although he didn't say anything to his mother). Until 3 months later they'd all gone up by 150%. Three Months.
THAT sounds like a bubble. Actually, that was 3 years ago. I've heard of Taxi drivers who now own 5 apts in Shanghai. AND have you see those apartment complexes? My god it looks like you've just stepped into the Borg collective. Sure they look well enough now, I'd hate to imagine what they look like in 5-10 years time. Even Tokyo looks pretty dirty, imagine Shanghai in 20 years time. It'll probably be called Slumhai.
Anyhow, I agree with your assertion the US economy is going to his the fan over the next couple years. I don't think too many people would disagree with you. But, as for China being the engine of growth that pulls that USA, Japan and EU out of the shit they buried themselves in, well, I really don't know. Maybe. Maybe not.
THAT sounds like a bubble. Actually, that was 3 years ago. I've heard of Taxi drivers who now own 5 apts in Shanghai. AND have you see those apartment complexes? My god it looks like you've just stepped into the Borg collective. Sure they look well enough now, I'd hate to imagine what they look like in 5-10 years time. Even Tokyo looks pretty dirty, imagine Shanghai in 20 years time. It'll probably be called Slumhai.
Anyhow, I agree with your assertion the US economy is going to his the fan over the next couple years. I don't think too many people would disagree with you. But, as for China being the engine of growth that pulls that USA, Japan and EU out of the shit they buried themselves in, well, I really don't know. Maybe. Maybe not.
OK, again, this is mainstream (this time CNN)
Now, THIS is the China I know and love
When the going gets tough, I'm a gonna git me arse outta here Seriously though, I think the Chinese are running into the wall as fast, if not faster, then the rest of us. We need an entirely new economic model. Hmmmmmm I was thinking Capitalism
Now, THIS is the China I know and love
When the going gets tough, I'm a gonna git me arse outta here Seriously though, I think the Chinese are running into the wall as fast, if not faster, then the rest of us. We need an entirely new economic model. Hmmmmmm I was thinking Capitalism
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There is no latter qualifer - you never really see much of any production of anything that doesn't have some underlying REAL NEED/demand for it. The point is that speculators run away with their estimates of what that demand is going to be - and then others get fooled and try to turn a profit by inflating the bubble and flipping their stakes before the crash.
There was REAL NEED/demand for houses in the US housing bubble, for tech companies in the dot com bubble, etc. Even the classic cases like Dutch tulips were based on some underlying demand - it's just that the speculators lost sight of it and got totally carried away.
You haven't offered anything to prove that what the Chinese population will be able to afford in the near future matches the increases in prices. Which is to say that this is all a big hand-wave - you point to the growth, note that people want housing, and then insist that whatever growth in housing prices we've seen must be inherently sound and justified. That's a non-argument. Housing prices have more than tripled in the last 6 years - you really think that income in China is going to keep up with that pace? If not, then the market is a bubble. Also, price-to-income and price-to-rent ratios are really high (both of those are classic indicators of a housing bubble).
That is the definition of a speculative bubble.
Again, nothing atypical of a speculative bubble, there. That's how they all work. The question is whether they got carried away in their estimates, or not. We're about to find out the hard way.