China’s Property Crisis Burns Middle Class

Independent Economist Andy Xie discusses the Chinese economy, how the issues with the property market are impacting the middle class and his outlook for the markets. He speaks on Bloomberg Television.
--------
Connect with us on...

[lindapindabelinda]

China used to have a high savings rate. Then the banks started realizing the money had been embezzled and stopped letting people make withdrawals. Burying gold is a thing again there.

[tariqomar]

For decades, government policy has been throwing the future under the bus. The day of reckoning is coming. I expect the stock market to crash as much as 80%. Investors will rush out of stocks and into real assets, There's going to be no cash in the banks.... You need a survival plan.

[bustertn]

It's even worse when you look at how much money they spent on high speed rail. Their version of the Federal Gov carries about half the debt but the various provinces carry the other half. Then many of them are not making enough money to pay even for the province costs. Especially some of their longer lines farther away from their capital. Were talking ridership in the 10-20% expected ridership just to break even.

[RayMak]

In any situation and every situation..middle class always get the short end of the straw. It's inevitable

[aggressivecalm]

🍯I can’t see China even maintaining its success with Winnie-the-Pooh at the helm!
🐴Eeyore needs to step in. Before all is lost!

[TechPedia]

You can only pass the price of inflation on to savers only if they can bare it. They can't especially since they're invested heavily into housing that isn't even completed yet. And when completed would be another tofu dreg.

[kpkhoo]

With constant interference, I don't see how a serious investor would want to invest in Chinese stocks

[bellosanimada]

Aa Really brought home how bad the situation is when the guy at the end expressed gratitude for simply having enough space to stand up inside his shared apartment.

[libertysprings]

Sounds similar to everywhere else in the world. Real estate bubble, plus lots of college grads disappointed at the lack of high paying jobs. Shortage of labor for low paying jobs

[c]

The property market needs to cool down in China. It's just way too unaffordable.

[babybellayu]

I really like what Andy Xie shared when answering questions. I feel what he answered is what really occurring in China.

[valetudo]

I actually have a theory.... one aspect of this is getting rid of the rotten, speculative, and debt ridden property market...but the other is that - the CCP wants to switch to a consumption led economy, and the property sector has been sucking up a ton of the spending from consumers (70% of household wealth is in property). By making real estate not as attractive, and with the money having nowhere else to go... I think part of this plan is to force people to basically spend their money domestically on consumption.. instead of is the speculative real estate market. Of course then there are a ton of other problems that come with that as well

[Kemet.]

If this is China's game plan (6:45) more infrastructure?
Isn't what got them here? Overbuilding without customers.

[MaxRuso]

winnie the pooh is a horrible dictator

[singlefather]

How can you allow financing on the incomplete properties? The incomplete properties have no values, and it can’t be used as a collateral to pay the balance of the mortgage. The banks will lose the entire balance. It should be more than several trillions of dollars. I am afraid that this is going to spill into our economy, since our economy is so closely tied to China. We have allowed many Chinese companies to be listened in our stock market. Allowed such a corrupt country like China to extract money from the US. They could have used the money to develop nuclear weapons that could be used against us. They have a strong financial ties to CNN and NBC. It is a shame

[grownupgaming]

1:38 less than 0.5% MoM declines. Come on, San Jose just had 5% MoM declines. Let's not overreact.

[davidortiz]

I don't feel bad for anyone who put they faith in banks

[seana]

How can they have too many homes with 1.4 billion people?

[arodriguez]

What a joke, as if real estate crashing was a bad thing, it's not. This creating wealth talk is was turned real estate into a speculative asset and investment vehicle; now its time to pay the price.

[_Negra_Arroyo_Lane]

Chinese people cannot get rich? Give me one country where the masses can get rich.