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1/6
Guo Shuqing is right to worry about real estate: since at least the Roman financial crisis of 33 AD (and probably earlier), nearly every major financial crisis in history was ultimately driven by a collapse in real estate. https://www.scmp.com/economy/china-economy/article/3112114/china-ripe-subprime-crisis-banking-regulator-sees-property
Guo Shuqing is right to worry about real estate: since at least the Roman financial crisis of 33 AD (and probably earlier), nearly every major financial crisis in history was ultimately driven by a collapse in real estate. https://www.scmp.com/economy/china-economy/article/3112114/china-ripe-subprime-crisis-banking-regulator-sees-property
2/6
But while I still think China is more likely to have a long deflation than a collapse, he is probably a little late in suggesting that “steps must be taken to avoid bubbles in the real estate sector,” although he could hardly have said otherwise. Unfortunately for...
But while I still think China is more likely to have a long deflation than a collapse, he is probably a little late in suggesting that “steps must be taken to avoid bubbles in the real estate sector,” although he could hardly have said otherwise. Unfortunately for...
3/6
China, because the creation of a real estate bubble has been one of the main drivers of growth, deflating the former also means giving up the latter. We’ve seen this movie often enough to know the plot.
What is most interesting about this article, to me, is that it...
China, because the creation of a real estate bubble has been one of the main drivers of growth, deflating the former also means giving up the latter. We’ve seen this movie often enough to know the plot.
What is most interesting about this article, to me, is that it...
4/6
once again indicates the urgency of the debate within policymaking circles. Some policymakers insist on extremely high growth rates for the next five, ten, and fifteen years, while others are gloomily watching mounting debt and increasing instability in the bond markets.
once again indicates the urgency of the debate within policymaking circles. Some policymakers insist on extremely high growth rates for the next five, ten, and fifteen years, while others are gloomily watching mounting debt and increasing instability in the bond markets.
5/6
But without a massive change in the structure of the economy – something which Beijing still seems unwilling to impose – I don’t see how China can get growth rates much above 2-3% without continuing to pour debt into non-productive investments, insolvent SOEs and...
But without a massive change in the structure of the economy – something which Beijing still seems unwilling to impose – I don’t see how China can get growth rates much above 2-3% without continuing to pour debt into non-productive investments, insolvent SOEs and...
6/6
overly-indebted local governments. I’ve spent the last decade teaching my best PKU students the experiences of other countries in resolving an excessive dependence on debt for growth, and one of the things they quickly learn is that there are no easy solutions.
overly-indebted local governments. I’ve spent the last decade teaching my best PKU students the experiences of other countries in resolving an excessive dependence on debt for growth, and one of the things they quickly learn is that there are no easy solutions.
