Bad sign for China's economy?

Discussion in 'Too Hot for Swamp Gas' started by demosthenes, Aug 8, 2013.

  1. demosthenes
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    demosthenes Well-Known Member

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  2. Swamper
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    Swamper New Member

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    as long as the Chinese keep buying u.s. made junk, the economy will be OK.
  3. ThePlayer
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    ThePlayer VIP Member

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    The Chinese are continuing to build things nobody will use.
    Good luck to them when their fortune cookies run out.
  4. gatorev12
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    gatorev12 Well-Known Member

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    It's not so much one skyscraper, it's the total property market. There's a reason we have strict zoning laws on new skyscraper construction (to the dismay of skyscraper enthusiasts) and it's entirely because overheating the market leads to its collapse--which in turn, leads to credit defaults from the building's owners, causing still more market instability.

    China has overbuilt over the last 20 years and it hasn't caught up to them yet, mostly due to their government desperately trying to cool down the property market (it's one of the few avenues for private investment in China, so it's led to a massive bubble growing). It's basic math: it will eventually catch up to them.
  5. ForniGator
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    ForniGator New Member

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    Good, China is, at present, our one true geo-political opponent, it is not Syria, Russia, or Iran.
  6. dadx4
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    dadx4 Well-Known Member

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    China's economy will pass ours very soon. They can slow down all they want but they will pass us with flying colors. Just goes to show you how inept our government is. In China they promote business and put very few regulations in the way. Here in the US now if a kid opens a lemonade stand in the front yard you get arrested.
  7. ForniGator
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    ForniGator New Member

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    My God, what an ignorant post. China practices State Capitalism like no other country.
  8. chemgator
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    chemgator Well-Known Member

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    China has a very good chance of seeing an economic slowdown soon. I don't think it is as likely to crash completely, because as a nation, they have plenty of cash and aren't borrowing money to finance the construction bubble. Individual provinces and municipalities are borrowing money for construction, but the central gov't can bail them out if they don't go too crazy. I was just in China recently, outside one of their "secondary" cities (3-4 million people). The town I was in had huge numbers of buildings going up--I could count about 25 from my window within 3-4 blocks (most look like 20-story apartment buildings). The new Changsha building is certainly over the top, of course. I would wonder how they plan on getting water up to the top reliably. High-pressure pumps can be very hard to maintain.

    The growth on the Chinese economy has slowed down quite a bit the last couple of years, and it has required the national government to pump in more and more cash to keep things from falling apart.

    The truly scary thing is that some of their infrastructure may not be built to last. Their thousands of miles of high-speed rail is built with low quality concrete, and may begin to crumble in the next few years. HSR concrete should be made with high-grade fly ash from high-temperature power plants using low-sulfur coal. They did not import any of this fly ash, and their power plants that produce high-grade fly ash only produce 1/7th of what they would need for the number of miles of track they laid during the 2008-2012 time frame. How did they do it? The truck driver handed the quality control analyst a sample of high-grade fly ash, along with cash, claiming it came from his truck, and once the sample passed, he dumped his low-grade fly ash and went on his way.
  9. dynogator
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    dynogator Well-Known Member

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    My son just got back from China, after living there for 2 years, and he was appalled at their construction quality. His apartment building was falling apart, and it was only 4 years old.
  10. GatorNorth
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    GatorNorth Premium Member Premium Member

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    So you think our zoning laws are in place to protect our economy? Tell that to the 6 companies who built high rise office buildings in Atlanta in 2007/2008 that all sat empty for 3 years.

    We have no more strict zoning laws on skyscraper construction than we do anything else. The reason there are no high rise office buildings under construction in the US is because there is ZERO demand for them, not because our zoning laws are protecting us.
  11. reformedgator
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    reformedgator Premium Member

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    Knowing that, I wouldn't get near that skyscraper, let alone get in it.
  12. gatorev12
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    gatorev12 Well-Known Member

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    I never said the system was perfect, only that's what it's designed to do in theory.

    City counsels have to approve and pass any new high-rise construction (for residential or commercial purposes) and, in most of the instances, they must measure the local demand for such an endeavor. The onus is on the developers and the private sector to ensure the demand is there before they submit their proposals.

    Demand is elastic, so it rises and falls along with the market (which is tied to the economy). When times are booming, developers and businesses might think they have suitable demand--but when the economy collapses, it evaporates. The empty skyscrapers in Atlanta tell me the 6 companies misjudged the demand and "bought" on the high end of the supply curve--not necessarily that there was a failure in the zoning laws (which, again, aren't perfect to begin with).
  13. demosthenes
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    demosthenes Well-Known Member

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    You didn't need to know that. Just read about how they are constructing it. Scary, scary, scary.
  14. asuragator
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    asuragator Well-Known Member

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    The gap between theory and reality can sometimes be very very wide. Booms and busts. When things are good, city councils/govts/private sector tend to get a little too pie-eyed about the future only to repeatedly have things bite them in the ass when the economy goes south.
  15. Gatorrick22
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    Gatorrick22 Well-Known Member

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    Wow, this is something to panic over. :roll:

    Maybe that stat (highlighted) is slightly inflated/exaggerated? :whistle:



  16. GatorNorth
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    GatorNorth Premium Member Premium Member

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    City councils have to approve all zoning changes and some variances (depending on codified procedures) not just high rise construction, and have no say over sites already zoned for certain purposes unless variances from zoning are required. Their approval has nothing to do with protecting the greater economy as they are the least qualified to make the supply and demand decisions you reference. Their role is to enforce local zoning codes and conformity with master plans, (unless you are in Houston where there basically is no zoning code).

    I've been a developer for almost 30 years and have attended hundreds of zoning meetings for high rise office buildings and large shipping centers all around the country.. The only time developer economics is ever discussed is when public infrastructure assistance is on the table.. It's not the role of the council to protect the developer from himself. They don't make supply/demand decisions or determinations.. You're just wrong about that.
  17. MichiGator2002
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    MichiGator2002 VIP Member

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    Aside from our bonds, what other US made junk do the Chinese buy (c wut I did)?

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