{"id":21783,"date":"2016-09-23T14:18:06","date_gmt":"2016-09-23T19:18:06","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21783"},"modified":"2016-09-23T14:18:06","modified_gmt":"2016-09-23T19:18:06","slug":"china-relies-on-property-bubbles-to-prop-up-gdp","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21783","title":{"rendered":"China Relies On Property Bubbles To Prop Up GDP"},"content":{"rendered":"<header class=\"post-header title-container fix\">\n<div class=\"title\">\n<h3 class=\"posttitle\"><a class=\"entry-title\" title=\"China Relies On Property Bubbles To Prop Up GDP\" href=\"http:\/\/www.theautomaticearth.com\/2016\/09\/china-relies-on-property-bubbles-to-prop-up-gdp\/\" rel=\"bookmark\">China Relies On Property Bubbles To Prop Up GDP<\/a><\/h3>\n<\/div>\n<\/header>\n<div class=\"entry-container fix\">\n<div class=\"entry fix\"><center><a href=\"http:\/\/www.shorpy.com\/node\/21210?size=_original#caption\" target=\"new\"><img decoding=\"async\" src=\"https:\/\/www.theautomaticearth.com\/wp-content\/uploads\/2016\/09\/Sharecroppers1936.jpg\" border=\"0\" \/><\/a><br \/>\nCarl Mydans\u00a0<b>Sharecropper\u2019s family in Mississippi County, Missouri\u00a0<\/b>1936<\/center>Lots of China again today. Most of it based on warnings, coming from the BIS, about the country\u2019s financial shenanigans. I\u2019m getting the feeling we have gotten so used to huge and often unprecedented numbers, viewed against the backdrop of an economy that still seems to remain standing, that many don\u2019t know what to make of this anymore.<\/p>\n<p>Ambrose Evans-Pritchard ties the BIS report to Hyman Minsky\u2019s work, which is kind of funny, because our good friend and Minsky adept Steve Keen is\u00a0<i>the<\/i>\u00a0economist who most emphasizes the need to differentiate between public and private debt, in particular because public debt is not a big risk whereas private debt certainly is.<\/p>\n<p>And that happens to be the main topic where people seem to get confused about China. To quote Ambrose:\u00a0<i>\u201c..Outstanding loans have reached $28 trillion, as much as the commercial banking systems of the US and Japan combined. The scale is enough to threaten a worldwide shock if China ever loses control. Corporate debt alone has reached 171pc of GDP..\u201d<\/i><\/p>\n<p>The big Kahuna question then becomes: should Chinese outstanding loans and corporate debt be seen as public debt or private debt, given that the dividing line between state and corporations is as opaque and shifting as it is? Even the BIS looks confused. I\u2019ll address that below. First, here\u2019s Ambrose:<\/p>\n<p><a href=\"http:\/\/www.telegraph.co.uk\/business\/2016\/09\/18\/bis-flashes-red-alert-for-a-banking-crisis-in-china\/\" target=\"new\">BIS Flashes Red Alert For a Banking Crisis in China<\/a><\/p>\n<blockquote><p><i>The Bank for International Settlements warned in its quarterly report that China\u2019s \u201ccredit to GDP gap\u201d has reached 30.1%, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the scores in East Asia\u2019s speculative boom on 1997 or in the US subprime bubble before the Lehman crisis.<\/i><\/p><\/blockquote>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>China Relies On Property Bubbles To Prop Up GDP Carl Mydans\u00a0Sharecropper\u2019s family in Mississippi County, Missouri\u00a01936Lots of China again today. Most of it based on warnings, coming from the BIS, about the country\u2019s financial shenanigans. I\u2019m getting the feeling we have gotten so used to huge and often unprecedented numbers, viewed against the backdrop of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2674,14351,1269,1806,130,175,353,1583,418,6180,13924,1031],"class_list":["post-21783","post","type-post","status-publish","format-standard","hentry","category-economics","tag-automatic-earth","tag-basket","tag-bis","tag-bubble","tag-china","tag-credit","tag-gdp","tag-housing","tag-imf","tag-minsky","tag-raul-ilargi-meijer","tag-yuan"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21783"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21783\/revisions"}],"predecessor-version":[{"id":21784,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21783\/revisions\/21784"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}