CHINA's $9 Trillion Debt Disaster

[@dxer22000]

and if these are "official" figures, you can bet the real situation is a LOT worse

[@Sir_Godz]

thats 9 trillion thats not listed on the national dept but should be and national income from the provinces that they should not be getting

[@howardtreesong4860]

Every time you hear a government entity making claims about money, and China is an exponent of that tradition, you have to assume the situation is much, much worse. The amount they mention is the least amount they think they can get away with admitting to. That means the actual result is going to be excessively much worse and the local authorities stand no chance of servicing the debt and a recession in China is unavoidable once those bonds mature.

[@dustinchen]

not really, china hasnt fallen despite the same accusations. official numbers are way better.

[@dxer22000]

you do realize that China are the biggest liars on the planet?

[@boozolini4465]

Thank you Joe, yet another masterpiece

[@mike4480]

Thanks Joe for another great update,..it’s much appreciated .. 💙💛💙

[@pastpresent4948]

Many thanks for the best reports that are very rare to find these days I always follow your blogs … well done 👌

[@russellmitchell8177]

One of the best explanations I've heard for the whole shmeary mess. Thank you.

[@stardustjazztrio]

You give such thoughtful and comprehensive analysis of your target projects . Congratulations 😊

[@roxy52320]

Face their Karma!

[@stormtrooper2170]

Its like handling money to a thief plus conman. You can never get it back.👈🤣🤣🤣

[@ianhackwell8719]

Love your talks.

[@terryrasmussen6409]

Thanks!

[@ralphhardie7492]

That was a really excellent information clip. Last 7 minutes really explained a lot for me thank you 🎉🎉🎉🎉🎉

[@christianlax931]

Tack!

[@retsamyar]

and these are doctored numbers approved for release by the ccp... which tries to hide how bad the problem is as much as possible.

[@TheGrimStoic]

they succeed every time, don't they - so why not...

[@pennycandyys]

Exactly!

[@Mr11ESSE111]

so why then if they are so bad west fear of their "overproduction" and eu &usa shakes in fear for own industry which are nothing then overpriced/overhyped shit !!where is problem then !?let buyers choose not politician asssholes and elite which wants to sell you same shit product for 5-10x higher price

[@dewaard3301]

China has an incentive to make the West think it's not doing great, though. That might leave our politicians with a sense of complacency in tackling that threat.

[@bigotbiden]

@@Mr11ESSE111 Zero connection. Dih.

[@guildpilotone]

This all sounds like a giant pyramid scheme.

[@midimusicforever]

It is one.

[@SerendipityChild]

Like our economy, but in fast forward

[@michaeldelisieux5252]

Ppl that act like Chicken Little, talking about the “American debacle “ due to its debt or China’s for that matter ( in a system based entirely on IOU’s ) or are ignorant of what they are talking about OR professional deceivers. There is no other choice.

[@SerendipityChild]

@@michaeldelisieux5252 the second biggest economy in the world has a debt to GDP ratio of 77%. That is bad. The biggest economy in the world has a debt to GDP ratio of 123%. That is just fine, and if you think otherwise you are ignorant or indulging in professional deception. okay buddy. the USA *is* amazing and wonderful

[@BevenOiCarrinuinn]

The entire chinese economy is a badly managed ENRON.

[@JanBruunAndersen]

Thanks

[@Maximummax23]

Fantastic work Joe! Cleared up so much for me!

[@MasticinaAkicta]

Those debt stacked up quickly... 2014 to 2024... YIKES! Those numbers are HORRIBLE.

[@johanstjern4118]

It’s just unbelievable how China somehow fell into this debt trap just like Japan in the 80s. This is what they get for having a culture of yes-sayers. I bet even Xi didn’t understand what was going on before the red lines were introduced.

[@garymartin9777]

A lot of it went into high-speed rail.

[@SerendipityChild]

The USA has Debt to GDP Ratio of 123 percent, China has 77 percent It would be nice if the two biggest economies in the world weren't giant bubbles, hey?

[@johanstjern4118]

@@SerendipityChild That’s a mislead use of the figures. If you combine household, local government and state debt China has a higher ratio to GDP than the US. Those loans mentioned in this video are not included in the Chinese government debt numbers.

[@gio-ko7kf]

@@SerendipityChildJapan has a 200% debt to gdp ratio. The difference is these debts are to their own governments, not to the people nor companies.

[@Sukhothai77]

Great report JB. I tried explaining to my Chinese family members about boom and bust cycles within capitalism. They assured me every time that 'Capitalism with Chinese Characteristics' would not have the negative parts of capitalism in the West. It appears that they are finally starting to understand. For years, they told me that government investment, regulation and state ownership of companies would see Chinese Capitalism become the model for all others to follow, an economic miracle. There will be an explosion of anger if everyone loses their investments, after covid, many people there are a little more angry at their government.

[@xantiom]

It is a new "economy" every time there is a bubble. It never gets old lol

[@GHST995]

The fam sounds brain washed by the CCP propaganda.

[@raymondszeto4277]

The "Chinese Characteristics" is called corruption to the Nth degree. The laws in China are a joke, it's not design to protect the people, it's to protect the communist system.

[@gunmnky]

Chinese: We're immune to all the bad stuff of other countries Why? Chinese: Because we're the only human species in the world. Everyone else is a white monkey. Pretty much sums up my interactions with them when I was overseas.

[@sharpnote1480]

It seems the Chinese characteristics is build to excess. They have no desire to manage their production to the current consumption!

[@ScottLarrry]

Our economy is struggling with uncertainties, housing issues, foreclosures, global fluctuations, and the pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.

[@EricaWaters-lr6zw]

With the US dollar losing value to inflation and other currencies gaining traction, uncertainty looms. Yet, many still trust in the dollar's perceived safety. Worried about my $420,000 retirement savings losing value, I seek alternative security for my money.

[@WhitneyRoss-dj4rf]

With my demanding job, I lack time for investment analysis. For seven years, a fiduciary has managed my portfolio, adapting to market conditions, enabling successful navigation and informed decisions. Consider a similar approach.

[@MelissaHobbs-qm8wi]

This is definitely considerable! Do you think you could suggest any professionals or advisors I can get on the phone with? I'm in dire need of proper portfolio allocation.

[@WhitneyRoss-dj4rf]

Just research the name Desiree Ruth Hoffman. You’d find necessary details to work with a correspondence to set up an appointment.

[@MelissaHobbs-qm8wi]

I appreciate it. After searching her name online and reviewing her credentials, I'm quite impressed. I've contacted her as I could use all the help I can get. A call has been scheduled.

[@okiedokie4663]

Best Analysis ever , congrats!!

[@kocyszemaitis2310]

I was 600th like! Slava ukraini!

[@Joaodocaminhao0234]

Thank you

[@unfixablegop]

A trillion here, a trillion there, and pretty soon you're talking about real money.

[@kasperchristensen8416]

😂👍

[@maximeb6662]

They have to start looking in the sofa cracks

[@williamalexander9485]

US is $34 trillion in debt, China makes stuff people actually want, to the point where they are removing themselves from the western central financial system. Then you’d be talking about real money

[@SBCBears]

Everett Dirkson smiles down.

[@verttikoo2052]

European Union 🇪🇺 has a cash problem 🙄 We have 25 Trillion just sleeping on our current accounts 🙄

[@tonymckeage1028]

Great Video Joe, Perhaps the next Video should be about the "house of cards" that could fall over if this fails, thanks for sharing

[@geoffgill5334]

When it fails !!

[@1verstapp]

looks like another mgmt fail.

[@NexPutax]

Competent analysis and your research shows in the details it relies on. Thanks, Joe.

[@michaelcainap4249]

what a scam

[@kroey221]

Great video as always

[@angelarch5352]

"The only thing that could go wrong..." is if the entire China real estate system was a ponzi scheme

[@leogetz-rf1kf]

it kind of is. they took out 9 trillion in international capital loans to build ghost cities that ordinary chinese cant even afford to buy to live in. as long as international capital investment was coming in, they could afford to make payments on the loans. but with rising interest rates by western banks paying higher interest, those international capital investors put their money in the west because it was more stable and paid higher interest. so china cant afford to make min payments now.

[@samiam619]

From what I understand, it didn’t start as a Ponzi scheme, the Developers made it one by NOT finishing building what it started… A few heads need to roll!

[@kamsunleong6648]

Well this is peanuts. Try running up a 35 trillion dollar debt that increases by 100 billion dollars every month. Just keep those printers running non stop.

[@leogetz-rf1kf]

@@kamsunleong6648 dont worry the americans have a diversified economy with an economic gdp of 27 trillion a year last year. russian economic gdp was 1.9 trillion before the war and likely 900 billion and shrinking. as well russia lost 51 percent of their energy gdp to eu by pipeline they cant sell to anyone else in that volume. in addition the rouble is in low demand trade globally so creating an oversupply by printing roubles is gonna tank its value in reality fast. also high inflation caused by printing roubles as we see in russia right now. when it hits hyperinflation russia arrives at a 1990 ussr moment. printing 35 percent of russian budge in roubles to build ammo and weapons that get destroyed in ukraine and bring back no tax revenue to russian economy. recipe for disaster in near future as inflation rises to hyperinflation.

[@cadams2313]

o​@@kamsunleong6648

[@PeterProf7777]

Terrific video Joe. Very clear explanation.

[@edl653]

An important note, no one has bought property and are only buying leases. All those individuals who leased property are getting screwed and will not have any hope of getting all their money back, much less a positive return.

[@michaelweaklend]

He calls this out at 4:30.

[@Nova2Yung]

how to convince an entire population to participate in a ponzi scheme 101

[@MK_ULTRA420]

@@Nova2Yung That's easy, just make every other method of investment functionally if not outright illegal.

[@TheGrimStoic]

@@MK_ULTRA420 it gets worse - the vast chunk has already been monetized, so both citizens' assets and their purchasing power is about to evaporate substantially

[@MK_ULTRA420]

@@TheGrimStoic That would be a very bad time to have a bunch of electric vehicles everywhere, especially ones that lack any shutdown features when overheated.

[@jdavidblais]

Why we never heard some credit company lower the credit score of china ?

[@카일마진]

they did lower it tho ... try searching for Fitch rating and Moody rating ....I remember hearing the news that China got so pissed it raided the local offices of those companies

[@카일마진]

try searching for the Fitch Rating and Moody Rating ....they lowered it back in april

[@chrisfletcher86]

When you owe someone a little money it's your problem, when you owe someone a lot of money it's their problem. Wonder who owns the bonds!

[@dylanthomas12321]

Ultimately it's the Billion Chinese workers who put their savings in banks and investment firms which bought the bonds. Many regular Chinese have trouble withdrawing their banked money, they demonstrate, police knock heads. Investment firms promised big returns, now facing bankruptcy. It's even worse than Joe said.

[@paulchapin6877]

The original line goes something like “if you own a million dollars and can’t pay it’s your problem. If you own ten million and can’t pay it the debt holder’s problem. If you own a hundred million and can’t pay it’s the government’s problem.”

[@jbrown6367]

Hi Thanks, Joe Good stuff

[@seanlander9321]

Chinese property is the greatest Ponzi Scheme the world has ever seen. Honestly, they have no one to blame but themselves 😅.

[@junecampsall7474]

Great video

[@forgetn]

Joe it's an interesting problem, but a 100% domestic one. the solution is to monetize the debt, by printing money. It will lead to a devaluation of the currency (maybe). for more than two years bond pricing has become a state secret. The rest of the world is not exposed to this disaster, but it gets worse because, after the state authorities, the State-owned enterprises are the biggest bond borrowers. Again the risk of contagion is almost nil. They will replace bonds with cash book entry in Remimbi...fun time. BTW excellent summary

[@TheGrimStoic]

already happened

[@captainhadd0ck]

Every day I give thanks to the universe that I was not born in China.

[@jamesbuck2378]

Damn straight

[@ChickenMcThiccken]

i wonder what makes a spirit decide its going to live as a blind homeless child in india?

[@Davidt1066]

im terrible at eoonomics but im sure if these bonds been british, they would be james bonds and the issue would be far less to worry about. right?

[@TOMAS-lh4er]

I'm waiting to see the CCP get so desperate for cash that it invents a National emergency and forces all the banks to turn over a big portion of every netizen's cash savings they have in banks ! the people of China have a HUGE amount of cash in the banks right now, that might be the final thing that forces the people to finally REVOLT !!!!

[@ngmookleong3415]

born in Kensington is fantastic .

[@dragon723.]

9 trillion is the official number, it does not include black market debt nor various commitments that haven't been paid. Double the 9 trillion and remove 2 thirds of China's GDP to account for inflated numbers from the provinces to hit minimum targets set by the government and you start to realize why the wheels are coming off.

[@EarthForces]

Damn, that is way worse if you put it that way. HOW MUCH did they actually wiped out in their own "housing crisis"? Most of the borrowers are actually domestic. (including the CCP itself)

[@ulfosterberg9116]

There comes a moment when the pretence can not be keept up....

[@columcreaven8860]

Who owns the bonds though, bankers / pension funds, western money??

[@Serolfarim1]

Enormous hidden debt off the books.

[@TheGrimStoic]

@@columcreaven8860 exactly - its the lenders' problem, most seem to forget

[@buildorder06]

Thank you,Joe; very interesting indeed.

[@rb95051]

Local governments do no go burst, the bond holders are the one screwed….any idea who they are?

[@FatFrankie42]

*_comment for the algorithm gods_* ~ with 💞 & appreciation from Winston Salem, NC

[@tonysu8860]

Those that subscribe to the China Update channel have been following this problem blow.by blow for years now. This episode looks excellent for anyone who has not been following the Chinese economic crisis but does not include the attempts by China to resolve their crisis and failed Apparently the CCP has backed off enforcing policies like the Three Red Lines that shocked the economy The CCP also has recognized after taking from the Chinese for so many years that it's the only entity with possible resources to save the economy but the CCP is also loathe to risk its own wealth so has created a number of super long debt of at least 25 years . But who would buy 25 year bonds at below market interest rates? The idea is that the money raised by the CCP is then given or loaned to the local governments China's financial markets particularly those that sell only to domestic buyers are very opaque so no one can really see with certainty what is happening. By now, China is probably realizing that real reforms care needed and CCP efforts are too little too late and not effective and there is a feeling of loss of hope and giving up

[@TheGrimStoic]

you forgot the 5trill they've already remonetized local spvs with

[@WarH]

When is land leasing started in China anybody that had their hands in that cookie jar got money back from the cookie jar. There’s so much corruption going on there. Money was leaking out of everywhere. The developers were taken money in full from the buyers or the leasers and buying or leasing other land with that can’t do that. And that $9 trillion number that I have a lot more than that that goes a lot deeper. There’s an old saying in this country you don’t put all your eggs in one basket, housing markets anywhere in the world can go up and go down. That noise you’re hearing at the end is a big thud. What a mess and the sad thing is that the CCP does not care about its own people. They care about what they can liner pockets with right now they got cotton balls in there they’re looking for dollar bills, that’s all they care about

[@geoffgill5334]

Sounds like a monumental ponzi scheme

[@SerendipityChild]

The US has Debt to GDP Ratio of 123 percent, China has 77 percent. These countries are 16% and 25% of the world's GDP, respectively. It's a worry.

[@fredwestsshovel1525]

The Chinese have become a broken chopstick. I read the book The Broken Chopstick. A very engrossing apistles 😊

[@pixeldup]

In finance, 'special purpose (vehicle/aquisition company, etc)' = scam. Just one big casino.

[@patrickshanghai2064]

scary situation. good video, Blogs.

[@SuperAnatolli]

Looks like some of the chinese regions has some inconveniences brewing up..

[@barrywmurphy2]

Great work Thanks for posting!

[@wilderbeestmcc6539]

Communism trying to play the capitalist game with government caveats. Always was doomed to failure😂👍

[@Ukie88]

kzbin.info/www/bejne/eZLEqmRufZ6ErLsfeature=shared

[@abcxyz123]

It's not truly communism. Needs another definition

[@dreamfirefight9456]

Fascism?

[@MultiMyNickName]

Are you THAT stupid? China OWNS ITS OWN BANKS AND CURRENCY, how can it possibly have debt? Do you understand WHY the West has debt? The West has to borrow money from private banks like the FED. China doesn't, its its own bank and it controls its own currency there is nobody who CAN lend to China dear. There is no national debt thats a US Western lie to try cover the fact their model is wholly corrupt.

[@gazzman6547]

@@abcxyz123 It's called Communism with Chinese Characteristics.

[@Birch37]

9 Trillion is probably China's actual GDP 😅😂😅

[@hydroac9387]

Close. In 2022 the GDP of China was ~$18 trillion dollars

[@AllDay3090]

No, it's China's actual population according to the very reliable & trustworthy Chinese government. 😂

[@ulfosterberg9116]

Probably less. Some ten years ago chinas GDP was estimated to be 40% of the official figure. Since then growth has been anemic but official figures still show healthy growth.

[@LittleRadicalThinker]

Maybe 9 times of the actual GDP..

[@henli-rw5dw]

Right now they probably manufacture 40% of all global goods and rising. China's gdp has always been bogus. It'll be a big issue when they exceed 50% of global manufacturing.

[@jefferee2002]

It's funny hearing Westerners who are so impressed with Chinese cities compared to those, say, in the United States. Whelp, time to pay the piper.

[@PeanutsDadForever]

Thanks for your great videos. 🇦🇺👴🏻

[@sfbluedevil8588]

That could be triple in number! Wait until the bubbles burst then the real numbers will be a big shock. I won’t be surprised lot of US retirement fund is invested in these type of bonds 😅😅

[@flagmichael]

You're thinking of Social Security, I presume. It doesn't work that way. Sold as a "pact between the generations" the money that is acquired from earners and employers is mostly sent to SS recipients like me, month by month. It is a very dynamic/volatile pathway. The SSA reports, "Asset reserves grew from about $163 billion at the end of December 1989 to about $2,908 billion ($2.9 trillion) by the end of December 2020. Since the end of December 2020, asset reserves have declined slightly to about $2,767 billion ($2.8 trillion) by the end of March 2024." Not bad!

[@marcbarash6045]

thanks joe

[@RudolphADiMaggioJr]

How does the shoddy construction play into this situation?

[@finnya4720]

Very in depth

[@PeterP552]

The property market in Australia is HOT. I think unconfident Chinese and Asian "cleaned" money buy here, driving up real estate prices and deprive locals of affordable housing. It is a huge problem and becoming a larger one continually.

[@Rampart.X]

It's a massive racket and the government is involved.

[@chirawanphung]

Yes, wealthy Chinese are taking their money and heading out of China to more civilized places with transparent and fair rule of law.

[@PalleRasmussen]

Or Muscowites. Like in Londongrad.

[@way2dumb]

I agree, but not just Chinese, I believe. Housing bought and left empty in Australia is part of our rental crisis, along with public rental housing not being built. Rents here are insane!

[@paulietv2162]

Well, I am in Australia and this is all down to Australian politicians, they are the ones who allow this

[@seegurke93]

Hey Joe :) I always watch till the end when the cute video comes of some animals. Thanks :) Grüße

[@blackadder564]

"They couldn't see any end in sight in terms of the increase in property values and the increase in property sales." Isn't that the same whenever somewhere a real estate bubble bursts?

[@alexv3357]

Financiers are generally not history majors, after all

[@blackadder564]

@@alexv3357 Well, they should study history. To not make the same mistakes again. But well, I guess they can afford it.

[@alexv3357]

@@blackadder564 If they can afford mistakes, they should be able to afford degrees too. Those are probably a lot cheaper.

[@blackadder564]

@@alexv3357 😂

[@daveofyorkshire301]

Who are they defaulting their debts from? Whose holding those tickets? Who is rhe LoLR (Lender of Last Resort)?

[@davidhynes]

What happened to China dethroning the USD?

[@quasar6959]

When the title said vehicle I thought we were getting a video about EVs from china that are heavily subsidised and how they can’t sell them.Maybe a video about them in the future

[@Roger-d5o]

Some very disturbing reports about savers in China having their bank deposits forcibly appropriated to purchase local government bonds.

[@christianlibertarian5488]

It is really difficult to figure out who is left holding the bag here. Probably by design. Trillions in debt, but mostly owed from a government corporation to another government entity. Ok, so the government decides one day to write off the debt, or to simply freeze it (effectively already happening). In the real world, the effect would be to stop further development of this type (also effectively already happening). But in money world, what does this mean? It looks to me that this essentially subtracts trillions of yuan from whatever China uses as an equivalent of M2. It appears to me that this also is already happening, visible as the deflation China is experiencing. So, my tea leaves say that China will have to print money by the junk load, forcing Chinese consumers to eat the cost.

[@MK_ULTRA420]

"So, my tea leaves say that China will have to print money by the junk load, forcing Chinese consumers to eat the cost." China has already been doing that for over 30 years.

[@EarthForces]

@MK_ULTRA420 True, but now they can't deny that it will blow BIG TIME on their faces. They got away with it because the pretence was kept on running by both their government and the greedy investors. (especially foreign ones)

[@TheGrimStoic]

already happened last quarter

[@dylanthomas12321]

Their M2 is an order of magnitude higher than the US. I did some research but forgot the number. It was unbelievable. Their currency is a fiction and they're having trouble propping it up. Remember, they import 11 million barrels of oil per day and 70 percent of their food, and most people want dollars for those. They're ina bind.

[@stepup898]

If everybody is in debt, who do they owe it to.

[@Relocklabs]

the lizard people !

[@attackxxx]

The People you will never meet because they live in the Islands being massaged by the young.

[@odenat3701]

Most of the debt is owed to each countries own people&banks because all the governments are selling trust funds. Other countries, investors and foreign banks are also buying those funds.

[@Nova2Yung]

to themselves and anyone thats sick in the mind to buy Chinese bonds lmfao 🤣

[@alexandrupopa8333]

If i give you 1$ the total debt is 1$, then you lend someone 1$ while still owning me my dollar then the total debt is 2$ this is how i understand it

[@annamaria-pv1fw]

Thx

[@elisabethnygaard8525]

Bobble’s always bursting in the end.

[@JohnDoe-jd7oc]

Tks Joe. Cda.

[@BaileyJames-zv2ddd]

Without a doubt, this year will be worse than the last. I lost a lot of money last year as a result of bad investment choices that I would not have made if I hadn't been so worried about my portfolio. I kept investing, but I couldn't determine whether to start paying for a house. In the end, I sold my positions, and the house needed more work than I had planned. I'm not sure how long I can keep going like this

[@ms_christinejones]

We've all made mistakes at some point. You should consider financial planning

[@agentjacob4099]

True. My portfolio was diversified across several markets with the help of a financial planner, and were able to achieve over a million in net profit among high dividend yield equities, ETFs, and bonds. It is vital that you have a variety of exposure, including in firms that are currently generating cash flows.

[@BaileyJames-zv2ddd]

Do you mind sharing your financial planner?

[@agentjacob4099]

*Leah* *Foster* *Alderman*

[@agentjacob4099]

Simply glance over her details to learn more.

[@sofjanmustopoh7232]

Debt fueled growth

[@vincentyeo88]

Exactly like in Amerika! 🙃🤣

[@johnschwartz8015]

Hi Joe - I have been a regular follower of Your fascinating presentations. I have not taken the time to comment often. The scope of the problems facing China demand an educated leadership. Pooh is not intelligent, and amazingly that was a big part of His selection process...😢😮😢😮. Thank You so much for Your kindness and excellence.❤😂🎉😅😊

[@JasonAmir-qo4uo]

Investing in this economy is a hell at times for the average person that wants full control of their finances, Even investing in ETF stocks can be risky

[@JoshuaEdson22]

Well, I gotta admit, I took a hit in the profit department with my stock moves. But hey, every red chart has a chance to turn green, right? Time to step up my trading game and flip that chart for the better.

[@JohnMiddleston]

The question to be asked at times is not if the government or the economy is responsible for the sudden dramatic shifts in the economy but if we are taking the necessary measures to avoid making losses no matter the situation even if the pay roll is not in your favor.

[@MichaelSaito-fq9gz]

One of the reasons i follow up these stock videos is to improve the returns of my investments and i can’t really say I’ve been seeing noticeable change though …. I’ll keep following to improve my investment philosophy anyway and find better ways to create smarter investments.

[@John-ww2fv]

What would you consider the necessary measures though? I was at a seminar two days ago where investors gave their opinions on how we can better investment for proper returns.

[@GibsonJames-gr3on]

@@John-ww2fv At times not just creating smart investments but buying assets can improve your profit margins in the long run.

[@williamgatheist1314]

Joe why no try a video with USA, Japan and China, total debt, and ability to pay, without ramping up the printing press?

[@Ukie88]

Waste of time for Joe as the west has a totally different mindset.

[@williamgatheist1314]

@@Ukie88 I would like to see the exercise mainly because I do not believe China has anywhere near the debt-to-currency problems that the US and Japan have!

[@kristinfrostlazerbeams]

I realized at an early age that sweeping the crud under the rug would just make an even larger, more intimidating mess for me to clean up in the future. It's not a Chinese proverb, but it probably needs to be one. Just with fancy poetics.

[@schopen-hauer]

still trying to figure where does the 5% growth rate comes from, cant find a answer.

[@Jaysqualityparts]

Always to boot.

[@IxGxNxI]

Party requirement. And if the reality does not match what the party wants, that's reality's problem.

[@TheGrimStoic]

from winnie's pooh

[@brianboye8025]

Great information Joe, thanks. I do note the US debt payments now. Nothing to be proud of.

[@ValentinArzola]

China literally looks like it is in an economic depression. The CCP is just not willing to admit it to themselves, much less the world. They have a deflation problem in everything they produce in the private sector, of which not much is left. All the land leases, that the local governments depended on for revenue are no longer valuable enough to sustain the bond debt and to make things worse, the working age population has a unemployment rate so high that the government doesn't report it anymore. This situation is so much worse than Japan in the 1990s. It is only a matter of time. One of two things is going to happen in China. The CCP is going to deflect and blame its problems on the Global West, creating termoil outside of the country and starting a major war by invading Taiwan and attacking Japan and the Philippines. Or there will be major protests to overthrow the CCP in China. Either way, it is going to be bloody.

[@ulfosterberg9116]

It is true that xi needs a Victoria. But it is less likely that they try with Taiwan inspite of all the retoric. Siberia is a much better fit for his aspirations. China would have natural resources and a hinterland that would make it invonurable to the west and all central asian countries would become vassals.

[@TheGrimStoic]

@@ulfosterberg9116 Xi poor guy is just a crook - Putin's a kook - no Sir - South Tibet, not Siberia

[@TheGrimStoic]

Any other scenario may happen - bowl of petunias, blue whale - you name it - but CCP overthrow - well - they can try

[@jameswalker7899]

Another detailed, insightful analysis of a subject that gets little attention. Warmest compliments. Thank you, sir, for this interesting podcast. :)

[@wilburnprice9886]

Even the US Gov could not make as big a mess as this.

[@robertgallagher7734]

Don't give them any ideas.

[@stevecoinitin7521]

Chinese local authorities were also duped by local manufacturers. Under a state system, manufacturers could claim big support grants from local authorities if companies hit certain targets. So many companies abused the system, massaged figures or over-produced electric car and bikes etc and created shortfalls in local authority coffers! That's why we saw fields of unsold electric cars and mountains of unsold bikes!

[@MortenChristensen1979.]

Based on the Chinese laws lands can not be privately owned, people only have the right to use the land,but not own the land, house ownership expires in 70 years. Thats just insane !

[@magnushelin007]

And if you buy an apartment that is 35 years old, you pay for using the apartment for 35 years.

[@Nova2Yung]

Its essentially daylight robbery by the state

[@stone-hand]

I am pretty sure that the same is/was in the UK - the land is owned by the crown/state and "leased" for 99 years, lease to be automatically renewed on expiration - maybe under payment of a small registration fee - unless some rare exception come into play. The difference is that we all suspect that the Chinese government will play fast and loose when THEIR lease start expiring.

[@TheGrimStoic]

that's perfectly logical - what's insane is people biting into it at scale

[@neolithictransitrevolution427]

70 years seems pretty reasonable. I don't think this is a flaw as you describe it.

[@alexv3357]

For a sense of scale, local governments in 2019, before the pandemic hit, were funding anywhere from 25% to 40% of their normal operating budgets through LGFVs.

[@bobbrown8661]

President Xi: Oh Bother.

[@dreadpenguinlord340]

He's discovered that there's nothing left in his Pot of Munny.

[@reformed1trick739]

Nothing tells a story like a chart

[@exponentmantissa5598]

JOE - Any chance you could cover Canada. We have a govt that is determined to climb back down the ladder of prosperity. We have massive immigration (and not the right kind), some of the worlds most expensive housing, a spiraling debt/deficits, lack of foreign investment and a full on frontal assault of our resource industries. I lived here my whole life (I just retired) and I have never seen the country slide as much as it has in the last decade.

[@gregparrott]

9 TRILLION$$$? Just on LGFV? As best I understand it, China also has a lot of other debt instruments in areas such as federal debt, their international 'belt and road' enterprise, state owned enterprises, etc. I'm sure there is partial overlap. But I'm also sure that areas such as the 'belt and road' is not counted in LGFV, and has been estimated at hundreds of billions of dollars in non performing loans.

[@-FALKOR]

🇺🇸🇺🇦❤🤍💙💛🌹🇮🇱🤍💙‬

[@alexg3348]

Go Joe!

[@JessSimpson1313]

I feel so bad for the average Chinese citizen having to deal with all this. The government limits where you can invest your money, creating a situation where basically a house is the only thing you can put money into that you know will be there when you need it and then the government creates a situation that results in you not even being able to get the house you paid for. Now the local governments are insolvent and the outlook of everything looks like it's going from bad to worse. Hopefully the government will take care of them, bit given the actions of the government to date I wouldn't be holding my breath.

[@vincentyeo88]

Fortunately, those farmers' children, who are stupid not to buy any real estate because they know nothing but only farming, are the ones who don't lose their money. 💰🤣💰

[@ProjectMotive]

Vs the US 33 trillion dollars in debt

[@inkmetal1]

Couldn't happen to a nicer country.

[@YourHineyness]

Planets are like animals: every one needs an a**hole.

[@joelturley4847]

china is in decline 😢 Sad

[@MrDevilgodspeed]

Same as Apple, when there is no way up, the only way is down. No such thing as non stop rising

[@schloops8473]

@@MrDevilgodspeed yah but Apple was the most valued company on the planet... shouldn't be compared to china where the average citizen is poor, the debt and deficits massives and the demographics are horrible.

[@WilliamKirkland-j4r]

Thanks for sharing your insight, knowledge and candid analysis of the China bond and real estate development markets. Bill K.

[@KevinInPhoenix]

Who would have thought that communists would be spectacularly bad at playing capitalists?

[@TheGrimStoic]

look again

[@michaelstuart777]

Thank you for a very clear comprehensible summary of the local government debt situation in China. In hindsight it was not a good idea to restrict repayment of the bonds to income earned from the sale of leases only. If Municipalities had been allowed to use other income they might have been able to keep debt at sustainable levels.

[@beautifulsmall]

The Infrastructure must be amazing after spending $9T, right ?

[@Jaysqualityparts]

😂

[@EarthForces]

Tofu Dregs is a thing in China. A good chunk of that 9t worth of "investments" are essentially rubble with the rest, to become rubble when the structural integrity of the building fails.

[@midimusicforever]

It's going down, down, down down...

[@tonygee5087]

Yes that is a big total of debt. But it is important to understand that my understanding of the local gov debt is owned to other Chinese not overseas creditors. I'm not fully informed but I believe most of the local debt essentially comes from domestic banks who also manage investment funds of chinese people. So, when the local gov can't pay it's interest the central gov seems to be simply "printing" money and transfering that to local gov accounts. Also, local small chinese people will also just lose their funds in the banks that were "invested" with the local gov. so, it is noting like the catastrophe of nations defaulting on their foreign debts but rather is tantamount to an internal transfer of wealth from chinese investors to the State. The people will also pay the inflation caused by the central gov printing money. It is a bit like if one of your companies owes another one of your companies and one defaults on the loan to other. You haven't actually lost any money but rather there is transfer of wealth from lending company to the debtor company. China doens't seem to have an inflation problem but rather a deflation problem so printing money and bailing out failing banks and local govs has a long way to go before it causes high inflation. So, it's nothing like the problem you might think. The other thing is that China has a massive balance of trade surplus so every year it builds huge reserves of foriegn currencies. This is also completely opposite of most other coutnries. Countries with foriegn debt and a trade deficit can very quickly default and chaos ensures. But China is structurally completely different.

[@Jaysqualityparts]

Problem is that system works fine when people are buying their goods but tariffs and nobody wanting their products anymore because of the way they’re acting is turning into a major problem for China.

[@iivarilappalainen9836]

Normies loosing their and their extended families life savings is far from minor issue. It's gonna splash big time there.

[@chirawanphung]

@@JaysqualitypartsI wish people would avoid buying Chinese made products but I fear their consumerist habits won’t change any time soon.

[@马克饱杯]

What we’d like to know is how bad is this debt level compared to mature markets in the west like the UK and France for example. And even the US.. some states surely there are, same as some Chinese provinces, heavily in debt. Being in China since 1990, we indeed can hardly see how it could be better.. as the CCP has no idea how to make it better since the old recipes don’t work anymore. Worse yet is that the country has become not attractive anymore.

[@marcz6653]

I’m starting to think Joe is a CIA propagandist!! 😂😂

[@carolinerondon8934]

He is merely using their own numbers. There is even more problems as the shadow money in China is quite high.

[@CoreyMcKay-r7b]

Wow this one just wow! Found it interesting that only Tibet has a responsible LTD ratio in all this

[@alaindumas1824]

I think Tibet is in the "no data" category.