#AncientTexan

Lessons from Evergrande in China

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  • $300 billion in debt
  • 300 million poor still exist in China
  • 30% of China economy is real-estate
  • 70% of Chinese savings is in real-estate
  • Gini coefficient U.S. 41.1 China 38
  • Property
    • 1.4 million properties in       suspended construction and or not started
      • Ponzi scheme
      • 90 million empty properties.       Prices should fall
      • People who bought properties       are not in the same cities as where the properties were built
      • 300 million poor not able to       pay the rent
      • How to protect investors and homeowners.
      • Political dimension
        • Stay in power by improving       economics
        • Can't print money without       consequences- not world currencies
        • Public not OK with house       prices falling
          • 20% drop already
          • Protests in China want help from the government
          • Turn into a national company?
            • Forced restructuring
            • Bondholders overseas
              • Hong Kong
              • 30 days before in default
              • Foreign exposure
              • Indicative of general China growth slowdown
                • Power cuts around china
                • No immigration
                • Limited minority involvement in the economy
                • Slow down from demographics
                  • Vietnam picking up China manufacturing
                  • South China sea tolerated because they are the growth engine
                    • ...more
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