How China's Banking Crisis Could hit the World
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- Опубліковано 16 лип 2022
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China's economy is struggling at the moment, and has been for a while. So in this video we look at the latest looming issue, China's banking crisis. It's small at the moment, but it could eventually impact the entire world.
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This is actually even more serious. This isn't just a housing crisis like it would be in the west. The vast majority of "investment" is done in housing. Rather than buying stocks, bonds or other "growth" markets like we would be in the west, Chinese buy a 2nd or 3rd house. THAT is their long term investing strategy.
If the housing market swings wildly or collapses it's literally taking a large portion of the populations investments with it.
About 70% of the household wealth is in their houses. About 30% of the GDP is in the housing/construction.
About 1/3 of the local gov income is from land sales.
@@garychen2048 Pardon the poor analogy, but that is like a house built upon a single pillar. Everyone from those with ANY investment income to those with fortunes, so much of it seems tied up in housing. Without an open market to diversify your investments in it seems like the entire system and hundreds of millions of people can be wiped out.
This new development essentially leaves people with money in investments they can't withdraw and others with nowhere to invest their money. It's like a stock market where you can't buy new stocks or sell your old.
I know there are families that have put money into a 2nd and sometimes even a 3rd house simultaneously neither of which is even built yet and now all the companies that were building them can't do so anymore and there's no (or far far fewer) alternative builders to go to that can finish them. This also means the cost to finish them will skyrocket.
I also read that because of the disparity in young adults because of the 1 child policy with boys being favored (2+ young men for every young woman) that families were purchasing houses for their young teenage sons so the house would be completed by the time they were of age because a young man without a house had almost no chance of marrying. Oddly the preference for boys in the 1 child policy times has made it a "buyers market" for the girls and their families now.
@@shadowbanned636 Yeah, I've heard about the newest mutation that is by far the most contagious.
And China is still so intent on not admitting it is an escaped lab virus they are making all worse. But, the thing mutates far too quickly and far too effectively to be a natural virus.
@@shadowbanned636 Isn’t that the same variant that has already been wide spreading in the US and EU?
@@TheNuclearGeek Very ironic that the Chinese people's collective idiocy has compounded in the situation we see right now XD
It's also important to remember that a banking crisis won't just threaten the massive housing bubbles, but the local governments themselves. As taxes go to Beijing but local governments are responsible for social services, it means these governments usually have to borrow to pay its social services. As the local government directly owns the land is controls, it does this by giving land to Local Government Financing Vehicles or LGFVs, which they then use the land as collateral for loans. If the housing market crashes, so will land prices, and therefore threaten the very budgetary resources of local governments across China.
yep the nation will collapse
@@NineSeptims MWAHAHAHAHAHA, nice
@@houseplant1016 No, it's not, the ripple effects on the world economy will be horrific. The 2008 debt crisis will look like a drop in the ocean by comparison
@@houseplant1016 you know that'll mean the price of almost everything will increase..
@@dkwhattouseasusername1012 I am independent on everything. I live in a forest with solar panels
To add something, not only the smaller regional bans are affected. Even bigger banks, at least Bank of Nanjing, are affected (not to the bank run level though).
The things is even the four largest Chinese state-owned banks have started to limit cash withdrawal, drawing the ire of the locals. If even the state backed institution are affected, thats means the situation is pretty serious in China.
The CCP know and were in on the con.
Because panick bank run will ruin the economy. bank Run will collapse nearly all bank, even the most major one in the world.
Bai lan or "let it rot" is gaining momentum and not just amongst the youth anymore, even so far as the middle class. If the property isn't built you can't get your investments money's worth, if you're not the getting income you can't pay your rent and if you default on your rent the bank takes your house. Great video as always.
The people who stopped paying their mortgage is doing so because the developer stopped building first, you make it sound as if the people stopped paying and then the company stopped building due to lack of funds which is false. These developers have misused the money the buyers put in and stopped construction for months before the people started refusing to pay their mortgage.
To add on to above, in China these developers get 70 year lease, you can't buy land there. So they get these lease when they sign the deal with government, so people pay developers as they make building, so the longer it takes to build, the less time remains on the lease, like if it takes 10 years to build the apartments, people who paid since the day one only have 60 years of lease remaining.... Local government make most of the money through these leases so when the ponzi scheme comes falling down it'll be worse than US housing crash.
Yeah i have noticed this in india people pay emi each month and even when they have completed paying home prices many developer have still not completed houses
@@ShubhamMishrabro in India there's no lease system, people who buy, own the property... So even if developer takes more time to make, only time is lost, in case of China people loose the lease, in other words the more time developer takes to make, the less time people who buy the property can have it .(lease in China 70 years since developer gets land from government)
@@kukulkhaan ohh😳
@@ShubhamMishrabro india has a booming population without a lot of land, so real-estate investments are great here, irrespective of the hiccups... We own the land, even supreme court has backed it (government has taken our land 2 decades ago, case is ongoing, we'll get compensation eventually)... In China when lease expires government can take back it's land at any time as Land there belongs to the Government, not the people... So one extra year in making is one less year in owning
These once in a Generation crisis's just keep coming...
@@secretname4190 are u sure abt it?
nah, its once in a decade.
End times. Read your bible
@@travelwell6049 don’t talk shite
@@travelwell6049 Wrong apocalypse. Have a look at the Prophecy of Thoth.
Nothing new here. Something similar happened in the US sometime in 2007. It is just another day where a scammer (the banks) gets hit. This goes on to reiterate the "Cash is thrash" cliché. I only feel for those who have their money with them. It's going to be a long long night for them.
facts only
@@davewong4783 There are literally a lot of options out there. Stocks happen to be one, only downside is you have be real careful about where you put your money or better still, get the services of a pro (that way, you give little room for error). Made my first million earlier this year this way. Good luck!
@@marlenaaj Very sound and pragmatic. I have been into this for long and though I won't say I have lost a fortune, but I have squandered quite a lot. If it's not a problem, do you mind recommending the pro you worked with? I could definitely use the help of one right now... I look forward to your reply...
@@stayhappy1161 Funny enough, I can honestly relate. I don't know if I am permitted to drop it here, but her name is "Leah Sandock Marie". Was in the news a lot in 2018. You can check her out online for more.
@@marlenaaj wow I know this little lady. Once attended a seminar she was also in attendance here in Vienna,, Great speaker with a funny accent,, She's American though, I doubt she works with foreigners,,,
2019: Chinese netizens gleefully cheer on White Shirts wantonly beating Hong Kongers.
2022: Chinese citizens get beat by their Great Leader's White Shirts.
underrated comment. proof that the CCP hires gangsters when they need to break up protests and that they don't give two shits about their own people.
the best UNO reverse card...
And then they came for you, and no one protested
Listening to this happen is like a replay of 07-08 in the states. Even to the point of atms drying up. I still remember my buddy unable to get his paycheck out. The rapid mergers of banks. Peoples retirements vanishing.
Those who do not learn from history are doomed to repeat it I suppose.
Every 100 years west tries to defeat Russia, and they lose every time. Humanity is doomed to wander in circles.
the difference between the US bubble and chinese bubbles....funny just how many bubbles China goes through every few years from the sheer scale of the wealth and prosperity in China, few years ago the CCP cracked down on the stock market bubble.
the difference between the two is the real estate bubble in China is backed by real wealth and capital, every single citizen has to prove they have the strict capital collateral and sustainable income before they are allowed to own the property,althought the companies do take out loans to develop the properties,ultimately it is the consumers that are the owners the loans and the properties and as long as they proved themselves worthy in the first place,......while the housing bubble in US,there is no such solid foundation,they simply took junk and repackaged it with junk,and then labelled it as prime bonds like prime grade USA chickens and kept it on their books or sold them to institutional investors that sold them to clueless idiots,and gave loans to every tom dick and henry with a questionable credit score and hookers with 5 mortgages.....and even took the insanity a step further by selling bets against the junk bonds they owned.....all of these had an amplifying effect which took a massive 5000 ton tnt blast into a thermonuclear explosion that destroyed the whole colony on lv 223.
They learned from it but the severity was a much higher. East asians really love their land and properties. I think my family has like 8 or 9 properties and we’re not very rich. Just very good in saving money.
@@yudistiraliem135 yeah not very rich,but have enough income to buy 8 or 9 properties.....lol.
especially with the property prices in China.....even shenzhen rent is insane compared to cities like Singapore and new york and those are the richest first world cities.....and China's gdp per cap is barely 10,000 usd. when i saw the rent in shenzhen i was shocked,people earning 6000 usd a month in singapore would find it expensive nevermind the average person in china making 600 usd a month.
if u are chynese and u can own 8 to 9 properties in shanghai or guangzhou or shenzhen thats like the equivalent of owning 8 mansions in claifornia or penthouses in new york and making 50k rent per property per month.
@@yudistiraliem135 fool
I live in a part of Japan that's closest to China, and sometimes when it rains, the soot from the pollution in China stains the rain black a bit
It's most noticeable on white buildings
Environmentalism is Totalitarianism, Time for Japan to join the Exclusive Nuclear Club.
I may live in a shithole country, but thank god I'm not neighboring China
That’s sad and a little funny
China is indeed a stain
It's much worse in India and Pakistan apparently, especially the capital of Pakistan and Mumbai
Protests, or even localised Uprisings are most certainly not rare. They are a (for the CPC) frightningly more and more frequent occurrence. It's just that the CPC is rather good in keeping this out of the news, because it might give their people "inappropriate" ideas.
Well then, we *shouldn’t* give the Chinese people such naughty ideas, *wink,wink,nudge,nudge*.
@@sora5501 : Either way is fine (Communist Party of China or Chinese Communist Party), and either means the same: the Ruling Party in Red China.
CCP
They've cut off entire towns and small cities from outside contact before when they started causing trouble, hell they pretty much did this in Wuhan when the coof hit. Need somewhere to get organs when your run out of minorities after all.
@@bikkiikun “red China” lol. It is like 70+ years some still cannot cope with it. One party state is still a state with a state system like everybody else.
Evergrande's default was said to be a harbinger of doom for China's economy. For weeks.
Then Evergrande defaulted and the piece of news wasn't given any spotlight.
This is just to caution people from making assumptions. Economy is not really a science, it is often extremely irrational and or dependent on unscientific factors.
This banking crisis could lead to people losing money, to the property market finding a new balance and to a "no big deal for the international community".
Its actually more likely that it wasnt reported when it happened - because according to law in most western countries. You are pretty much forbidden to inspire a run on the banks - since the great depression in the 30.s
Id say why we havent seen reports its more basic - everyone is pretty much holding their breath.
It is rather insane that, as a species, we can put people on the moon, witness microscopic life and manage international war logistics, but Economics is still this dark art of sorts.
@@MultiKommandant Ya should listen to this guy, he comes from a long line of dark arts masters
@@MultiKommandant is it possible to learn this power?
Evergrande is just the tip of the iceberg. China's government is playing a juggling game.
2020s will be remembered as the decade of hopelessness
It's bananas.
3:05 More context on this "stop pay mortgage"
1st- the construction company uses unfinished project as collateral to get even more loan from bank and now they can't pay back. So even if you pay full amount of Mortgage, Bank is the one who own those house at the end not you.
2nd- China has credit system, if you failed(stop) paying loan/mortgage it'll affected 3 generations of your family. Which mean your children financial is ruined. They will never receive another loans or get a good job. So this is a serious decision that most will only take it if you have no other choice.
**3rd- Because of covid lockdown and economic downturn. Most people blew through their saving and now...they are broke. So they simply doesn't have money to keep paying Mortgage even if they want to.
I remember the words of one couple that refused to leave their apartment in order to be sent to quarantine, the cop threatened him that it would affect not only him but his children and grandchildren. The man said "We're the last generation, thank you."
I wonder how many of the mortgage people don't plan to create a next generation
*it'll affected 3 generations of your family*
Dafuq, that is so messed up.
@@Achmedsander Welcome to the joys of Chinese culture
Given that the majority of individuals use these housing developments (many of which are not even occupied) as retirement/savings. As ridiculous as it sounds it’s really the only asset in which individuals can invest. While the banks may be bailed out, the rapidly aging (and large) population will see the majority of their money evaporate.
New drinking game, take a shot every time TLDR mispronounces Henan. Gonna get drunk on that 白酒 real quick
One shot of 白酒 is enough for me thanks >.<
That stuff is nasty
Maybe their sponsors can have a course on how not to pronounce Chinese names like an idiot. Chinese may be a hard language to learn, but the pronunciation is pretty straightforward.
@@christopherwilson88 Mandarin is probably the easiest tonal Asian language for Westerners to pronounce
@@CombuskenKid I spent six months at YNNU as a student and my friends were having the absolute time of their lives because of the cheap alcohol, but I tried 白酒 once and was reminded of why I don't drink, it tastes like petrol. Nasty stuff.
A woke version of He-Man that Henan thingy
Whenever I'm in a bad mood I remember I don't live in China, and my problems don't seem so bad
I pray you dont live in Democrat states if you're American. Your mood would be wonderous! XD
what would be worse 🤔... life in China or the bible belt,
The world in general isn't doing any better though.
Thanks for the thought, it improved my mood too.
thank you for the input, whenever i read something like this as chinese, knowing americans are media brain washed so badly, it improves my mood greatly too. win-win situation
Also keep in mind that 83 billion is representing a highly centralized method of gdp for the CCP. That is to say Chinese citizens for the most part throw all their wealth into real estate. If real estate drops so does everyone's extra spending money which has knock on effects on the consumer industry also build on extremely high levels of debt. On top of that all the construction agencies used the same debt model to procure supplies for the housing construction. It's not 83 billion that's at risk, it is the ~23% of the entire gdp for realestate and the immediately related buisensses like construction and between 5 to 12% of additional gdp risk in consumer spending. Even the most well handled mitigation of this crisis will at the least knock chinese growth to around 1 to 4% a year for the next several years and if it's poorly managed the economy will contract for several years. The Chinese economy is so centralized and structured that most things can have positive feedback loops that leak into multiple sectors of the economy. Having a diversified economy is not enough to ensure resiliance, your population also needs diversified capital sources which the central government in china will never allow.
On top of this it's the same issue for local governments. The majority of local government taxes are from property sales because the central government heavily restricts tax income for each if the provinces. Its been getting even more restricted over the past decade. As a result, a collapse in real estate causes a collapse in provential budget. The central government does some similar management styles as the US to the states where the central government might match the amount spend on specific things, as a result there are knock on effects there as well since the provinces have no money to spend so the central government wouldn't have matched had it not basically been the central government saying keep spending and we will bail you out after. This is why central government debt increased 600%. It was not prepared to become the only source of money for all the provinces. This is also happening right in the decade where many international bonds are becoming mature so repayment is now at its highest peak. One thing people don't understand is how the CCP government obfuscated its true debt load. Most private industries are not really separate from the central government and should be considered government agencies run like a buisness. If you actually add all of chinas debt together it was closer to 420% of gdp in 2020. Because the pandemic it's probably closer to 500%. To put this into perspective Chinas total liabilities relative to gdp is worse then the US and they have 1/6th the productive capability per person of the US with non of the potential for energy independence or high external ownership of foreign capital chains like the US. Even their farming takes 5 to 7 times the raw materials per calorie of output of the US. Farming is also built on massive debt in China. The CCP has to pull off the world's greatest hat trick to get out of the situation while remaining a stable system.
Do you think buying a scratch card and getting lucky might solve it for them?
@@DivingDog0 hopefully not
Perhaps a huge amount of inflation will happen making Chinese goods cheaper to export. The CCP will be fine but they are taking a step backwards, and the population will suffer. Is this enough to cause a revolution?
Well, its not all doom and gloom if you think about it. This could potentially lead to good things in the long run. i do not know if it will pan out like that, but keeping a cautiously optimistic outlook is not necessarily a bad thing.
I saw a comment elsewhere earlier that guessed we'd have a semi societal collapse in 24-48 months due to rising costs of living and the wealth gap increasing.
I'm not sure how much I'd agree with it but it does feel like we are teetering closer to an edge of large amounts of first world populations being pushed into poverty, who knows what will happen!
Edit - referencing what could come after any form of revolt or revolution
If the end result is more nations encouraging domestic production and the world getting a more robust and diversified production and trade network so that one nation is no longer a single point of failure, and China is just one market and producer among many, I say that's a good outcome.
@@Hanloss *IM AN AUTHOR* on the collapse of civilisations - This is the list of contributing factors to societal collapse:
Plague / disease Yes
Environmental change Y
Massive wealth inequality Y
Loss of the administrative class Y
The government stops governing Y
Attack from the outside - now includes cyber attack Y
Loss of faith in the political system Y
Economic collapse Y
Exposed obvious corruption Y
Crumbling infrastructure Y
Mismanagement of a crisis Y
Societal division Y
Loss of belief in the unity of the society Y
Restriction of international trade / loss of trade agreements Y
Increased isolationism Y
Rising internal violence Not yet
Excessive spending on military / arms race Yes - starting in the UK
Inability to maintain the currency - hoarding / devaluation / inflation Y
If a majority of things on the list happen to a civilisation simultaneously, it is invariably the end for that civilisation. If all happen at the same time, it's guaranteed to be the end. The USSR collapsed with 9 out of the 18.
America scores 18/18. And you have reached "cascading interconnected systems failure" - everything is broken and everything you need to fix it is also broken.
The UK scores 17/18
@Olaf Sigurson Yes very bad a 2 in one deal...China collapse and Gorbachev part deux...
@Olaf Sigurson Precisely, and since it might very likely cripple Russia ,thus helping Ukraine win the war in the long term. And of course, it could lead to the entirety of the CCP revolting against Xi Jinping. So there is that silver lining to take account as well.
quality video as per. it's really worth taking the extra few minutes to clarify to pronunciation of some of the chinese areas
Great video!
"keeping the electorate happy", aside from the fact China doesn't have an electorate.
China's current system can't survive. They want people to work 12 hours a day, 6 days a week. They want them to buy homes that are so expensive that it would take 3 generations to pay them off. They want them to have 3 kids where even one is prohibitely expensive, not to mention that parents rarely have enough time to raise that one kid because of them being at work all day. Of course the people have to take care of their parents as well once they get too old to live alone. And whenever the population gets hit with something, be it their homes falling apart because of corruption or the banks stealing people's money, the government always sides with not the people.
they'll figure something out
@@sinoroman like how people figured something out in Sri Lanka?
Who figure out?
@@stuartcarter4139 ah yes, the american people tore down the AFG (american federal government) in 2010. good times
@@sinoroman sorry wen mao , Yeah sure, your people cant get money now, cry in the corner
Henan is pronounced Her-Naan. As in "Her naan bread looks tasty, if only I had some curry"
butter masala
Racist
Just for your information. There is a specific reason why the bank in Henan is not able to return customers' money.
The Chinese regulator conducted an investigation and found out that the money in the amount of about 40 billion yuan from the accounts of depositors was withdrawn using fraudulent schemes by the leaders of the holding, who control banks.
After the protests, the authorities have agreed to pay the money to bank's customers, starting with those, who had deposits below 50 thousand yuan (~7.5k USD), then after a month or so, after completing those payouts, they have promised compensations for people with deposits below 100 thousand yuan. But they are yet to start making the payouts.
The pronunciation of Henan was painful haha, but great video nonetheless :]
Doesn't corruption and lack of transparency play a big role in China's economic and banking woes? Extreme top down power structure, no division of power (corruption), the limited number of investment options people have to put their savings into (real estate and sketchy banks), the social pressure for a man to own an apartment before being able to marry all contribute to these problems. Concerning the pandemic, I believe that chauvinistic nationalistic pride means that the CCP refuses to use any COVID vaccine other than their own Sinovac, which has low efficacy, especially against the omicron variant. And another cultural trait, obsession with not losing face, makes the CCP fail to recognize it's mistake and correct an untenable zero COVID policy. A peoples cultural traits are always a big part of the problem.
Indeed. Very much like Russia and, to a slightly lesser extent the EU, the needs of the state / kleptocracy / bureaucracy come before those of its people.
As a Chinese all I have to say is you see China's cultural and political issues more clearly than most of Chinese citizens😅
Wait? Is it that strange to buy a house before it's build?
In the Netherlands it's also pretty common for housing development to start selling the houses as soon as the municipality approved the developers plan.
Is that different in other countries?
yeah, we dont buy usually until its built in the states or we contract it to be built and can get our money back it its not
Common in israel too… but typically with a payment schedule where you begin with a 10% down payment and gradually transfer money as the project progresses. When we bought, the last chunk was placed into what one could call escrow and the developer didn’t get the money until they handed over the keys and the municipal “form 4” (certificate of readiness for occupancy). Increasingly you see developers sell with 10-15% down payment and ALL THE REST due upon occupancy.
BTW, mortgages here are typically given for just 70-80% of the property value, which makes “house flipping” fairly rare.
It’s strange if it doesn’t get built.
from what i know, it's not really typical where i live, but the developer would start doing up showroom to raise interest and start the buying. but most people prob go for public housing which are build to order (hence BTO HDB flats) which will need a few years to get the keys. there are still people who due to trying to aim for various housing schemes or just financial/ housing needs that goes for existing flats or condos.
China is currently having crisis that are the same as almost all of Americas crisis for the last 100 years added together
I don't know about you, but I haven't heard of any bank that stole the public's money and savings in US
The entire world will have a similar crisis soon enough. We kicked the can of explosives down the road in both 2008 and 2020. The explosion will be all the more vicious.
Should we feel sorry or laugh at them
@@Truck-kun_01 laugh at govt... Sad for innocent people
@@parthlm1073 roger👍
Aside from the lockdowns (which are unsustainable) a recession in China could be good for the world as it adds deflationary pressure to an otherwise inflationary environment. China does have some fundamental, structural issues that need rebalancing and that is never easy.
Another way of saying the CCP is the problem.
how will it add deflationary pressure?
@@secretname4190 dude China is a net producer that affects supply more than demand, their consumption is weak relatively speaking. Choking supply is inflationary.
@@carbonfibercrypto2919 but burst in housing bubble won't affect their supply chains. Their stupid Lockdowns will.
@@carbonfibercrypto2919 Thats what i was thinking.
First the property developers, then the banks and then the debt hits the state which then hurts every person in China.Seems that the property developers have already tapped out and the banks are falling now.
_(grabs popcorn)_
After enlightenment my thoughts were no more. No longer did I hear that voice of condescendence, of judgement. And that was the greatest relief of all. You are enlightened. You are integrated and complete. You are just having fun remembering this. And there are so many ways to have fun!
With a flat on the edges on a 3rd tier regional city in the middle of nowhere costing more, than an equally sized apartment in downtown Tokyo, you know you simply burn your money...
And that still ignores the fact, that nobody really OWNs the flat. The Property on which the building stands is leased to the developer for 70 years. And when you "buy" the flat you have it for how much ever time is left of these 70 years. And the clock is ticking, the moment the developer leases the land... meaning, if he takes 10 years to build, you got 60 years left... well, that is of course if the building stands this long.
These are the first 'sore throat and not feeling quite right' of a global depression.
thanks guys.
Heart outstretched to all those swindled out of all their money, never to see it again. ❤️
Also, it’s not just the residents or He nan affected it’s people from all over China that put their money in the He Nan banks as they were offering high interest rates.
Thank you for mentioning China's deliberate housing bubble deflation at least once.
You do not buy house in China it is just 100 year lease
Yes but nobody expects the CCP to take back the land from people living on it as it will destroy trust and remove any value from the land that has been sold 70 years ago
I appreciate the videos, but can you please look up the pronounciation of local names? Like He-nan for example?
great video please more china news.
The pronunciation of Henan is brilliant :)
it might be helpful for the british TLDR staff to say it's pronounced like "her nan"
they always get their pronunciations wrong, i don't think they bother checking these things
@@hexdepixel1165 yeh actually thats quite good
@Damian S. Especially when it's not overly hard. Like, I can at least understand struggling with Russian and Ukrainian pronunciation...those consonant clusters can be brutal if you're not used to them. But for an English speaker, Chinese pronunciation is pretty easy if you just take a minute to learn to actual sounds the letters in pinyin represent.
@@lc5176 I think mispronouncing foreign names is a part of their brand now.
There are reports that the big four Chinese banks are limiting withdrawals. As in, can only withdraw a certain amount of funds, closing down online banking, limiting the people who can enter the banks to withdraw money. Contagion has struck, bad things are about to happen in the Peoples Republic.
There also was a 15min (unannounced) opening of online banking from the agricultural bank(?). It's assumed that that was done so the elites could get their money out.
@@sternchen6596 Oh yes, I heard about that.
Zac please write an episode that doesn't predict the end of the world; it's doing my head in
Love Matt x
citizen: *protest
government: -99999999 social credits
It was never expanded upon what cause the local banks to get into difficulties before the bank runs. TLDR said the Chinese authorities blamed 'criminal gangs'. Some such as serpentza say it was corrupt bank officials taking the money abroad. Part of it was probably due to the those (understandably) refusing to make mortgage payments.
I heard that this "deposits" are not savings or checking but some form of investment scheme that does not stipulate instant withdrawal.
I don't know if this is still true, but at least at some time even US savings account funds were (are?) not instantaneously withdrawable per the bank's right, though few or no bank exercise this right.
Pinning the crux of this argument on what's going on in Henan, whilst ignoring the context of the craziness that instigated the bank runs in Henan, really damages the underpinning of your point.
To add some context, the 'Criminal Gangs' being referenced are the corrupt officials who took over some local banks. Possibly with some criminal behaviour? I'm less sure on that bit. They then promoted savings accounts with interest rates ranging from the believable, to the insane. That (I believe) could only be accessed through an online portal. Which meant people from outside Henan could park their money there, without ever visiting Henan. Which got them a larger customer base.
Turns out. That online portal deposited money directly in to the scammer's/criminal's/official's accounts, bypassing the banks entirely. With the mastermind having fled abroad, possibly with the money. But not before sowing havoc by marking various people as covid positive in a bid to make sure they could not join the protest.
In past scandals, the banks would insure depositors according to a mandatory insurance scheme. But perhaps because the insurance scheme never included the possibility of online portals and out of towners, or perhaps due to the larger stressors on banks mentioned in the video, the rural banks dragging their feet sparked fears. Only starting to fold after said Henan protests. Wrapped up in it all is the fact that there're locals who are affected, as well as people from out of town who the regulators didn't expect, but also millionaires who got scammed in the millions. WIth the insurance scheme supposedly not covering accounts with the insane rates. So there's a frenzied quality to it as people at every level want to be included in the safety net.
Now the whole situation seems rather specific, but that there may be wider systemic risks to the network of rural banks that are so loosely regulated. So who knows what kind of criminal activities may be happening at the edges. But it does mean that trying to tie Henan to a wider Banking Crisis necessitates trying to figure out just how widespread this sort of criminal/corruption is happening at the edges of China's banks.
Neat
on the other side a lower export rate could solve the supply chain problem faster.
Love your work - so this is no criticism but simply a friendly suggestion: the pronunciation of Chinese placenames is consistently off (Henan for example is pronounced HER-nan rather than HEE-nan). A quick check on an app like Google Translate could fix this. It sounds pedantic but accuracy is important to the Chinese language to the point where a Chinese person would probably find 'HEE-nan' confusingly unrecognisable, with the phonetic syllable 'HEE' not even being represented by a Chinese character. Chinese is a beautiful and fascinating language and we as non-Chinese cant be expected to understand it completely, but we have apps for that😜
agreed, pin yin doesn't always works for foreigner without the language context. i'd recommend consulting with the taiwanese version of pinyin, or Tongyong Pinyin, to get a more close version of the names (tho it doesn't always works)
"Henan" is closer to rhyming with "anon" (kinda like huh-non) than with "Lenin".
Gosh, if only it could have been predicted that an lack of independent regulation and a functional legal system could result in this kind of collapse.
When banks can steal your money with impunity, why bother working let alone saving and investing.
This happened because the bank in question was investigated by a funcional legal system and they foud fraudulent activities. No bank in the world have at its disposal all the money i their accounts, so it's impossible for everyone to withdraw at the same time, but that what happens when there's a widespread feeling of being stole from the bank.
Hey, great video, but in the last couple of videos I've been seeing some issues with the framerate, it kinda just dips sometimes, and the footage gets a little choppy (I don't really know the right word for this, english is not my main language). Maybe it's worth looking into. Overall though, great videos!
I pray everyday for the downfall of the CCP. I would love to see their leaders held accountable for their actions.
More thoughts and prayers Fred
What actions?
@@avigailpekelman8239 what actions do you think? Is being a communist dictatorship that hides information from its citizens, has concentration camps and kills people who oppose it not enough for you?
"I pray everyday for the downfall of the CCP." this dude is a 'gordon chang the clown' fan, lmao
I pray everyday that the CPC will do better and further develop China.
@@sinoroman so you want China to overtake the US?
Don’t forget extreme weather and flooding!!!
There have been several crisises in China, but somehow China manages to avoid collapsing. I wonder if the goverment is simply too rich to fall.
The Chinese economy is highly centralized. Heavy government intervention is plugging the dike for now.
Maybe
You are also missing the fact that for most local authorities the primary source of revenue is from land taxes charged to developers. If the developers aren't developing land, and paying land taxes, there is basically next to no cash flow for the local authorities. Sure, they can get bailed out by the CCP, but current appetite for frivolities in Beijing is likely very low. Overall, the fiscal situation in the broader provinces of China is nigh-on catastrophic.
a good bit of echo in the audio
"Henehn" 😂
Henan. Province called “Her-Nan”
That 83 Billion a month.. I believe they were talking the halting of monthly payments.
@TLDR Plz consider an episode re China’s consumer sales ‘portal’ avail to RUs post-sanctions. Are products sold at market price? Or could China be pulling wealth out of RU via ‘price gouging’? 🤔
“Common practise to buy a house before it’s been built” I never knew this and this is very concerning. Of course, we can do this in the UK, but it’s not that common. People won’t pay a mortgage on a house that will never be built so they default and we say hello to 2007 again
It is very common on Developing countries, you buy the house "on the blueprint" and pay a monthly fee as their being built. Afterwards youu pay for the house itself (which tends to be cheaper than an already built one)
@@matheusd.rodrigues429 But China is not a developing country. Correct me if I’m wrong, but they have a higher GDP than the US
@@harryclark7404 It depends on the formula used to calculate the GDP, but GDP alone a developed country does not make (Portugal is a developed country while Brazil is not and Brazil is one of the 10th richest countries in the world)
@@matheusd.rodrigues429 What is the definition of a developed country then? Because I have a holiday home in Portugal, Northern Portugal and some people in the village literally live on €400 a month and have to grow a lot of their own food
@@harryclark7404 there are people in the US living in motels because they can't afford renting a house. Developed country is usually a plethora of indexes (GDP per Capita, HDI, GINI...). China is on the verge of becoming a developed country
Has anyone noticed that the "Yuan" symbol in the thumbnail is wrong?
Should be roughly pronounced “Her nan” with a lowish tone! But great video regardless
3:17 Is this not common anywhere else in the world? In Malaysia, it is common too. Just curious.
No
Buyers first check the rooms & electric & water connections.
In my country the developers tend to scam people in such deals. You pay for an apartment, you're lucky if you get anything at all, and if you do, it's 5 years late, and it's just a concrete box with no wiring or plumbing or insulation.
Unplanned spending without proper return on such investments would surely result in financial crisis and would be counter productive. The belt and road project and also the speed train projects along with unbridled building activity without market are all blunders. Also high defence spending which is unnecessary is an added burden.
Well, the US taught us otherwise
@@matheusd.rodrigues429 Could be some countries are promoting sale of defence equipments. But this increase of dangerous equipments would affect everybody in the long-run
@@ShankarMel The US is the biggest seller and holder of defense equipment. Anyone the US doesn't like HAS to better their defense to not be invaded like dozens have been in this young century alone.
@@matheusd.rodrigues429 true
Waiting since 1 year, for the crisis to take place...
More thoughts and prayers might help
Their economy wont collapse..
It will be stagnant for maybe 2-3 years maximum..thats it
Its like slowdown and a bit of recession.. they will recover like usa did
7:19 About Causing political crisis in developing countries topic,Myanmar/Burma is also facing the same economic problems because of Ukraine war and internal political crisis.
Could you make a video about Myanmar's potential failed state stage and how it will affect to ASEAN region.
I have been doing research on populist authoritarians, especially since the last few days in Sri Lanka. One thing i have notice is the BRICS tend to be led by populist authoritarian, but i ma not as sure about China. If anyone has some hard information that would prevent China from this camp I would appreciate it.
China and the ruling CCP are one of the most authoritarian regimes in the world, and as for populist, let's say that the party has an incredible amount of information on its citizens from mobile phone data and surveillance cameras so they can tell them what they should do at any given time.
It's not mentioned in the video, but there is some evidence that when authorities knew that certain people were going to protest against the bank collapse, their Covid app codes (an app that you must have in China) suddenly turned red to prevent them from attending.
did the CCP ever have the support of "the people" . The Tami Terminator did in Sri Lanka, but we have seen where that went.
That’s all we need In. This 🌍
It's pretty hard to increase consumption when the country is behind technologically.
Buying a house before it has been built? That is like super normal in Netherlands
Please do Malaysian Political Crisis
? What crisis? We don't have crisis, what happened now is just a norm as always, Malaysia Boleh! Lol
@@zrl0523 kurangkan pemakanan telur.......
@@zrl0523 Economy is getting worst, Politically unstable, Minimum wage not getting raise
@@sirarthur6463 That's basically the world at the moment.
Chinese authorities have an interesting record on problem solving: Who can‘t forget the „war on sparrows“ as the birds were picking up seeds from the fields. Millions of sparrows were killed. This led to an increase in insect population. So the CCP ordered all green lands around cities to be flattened. Which reduced the insect population, but increased sand storms in the cities.
The war on sparrows also indirectly killed millions of people but that's neither here nor there in Maoist china
It's the revolutionist attitude.
If there is a problem it needs to be completely rebuilt from the ground up. It's like doing surgery and asking for a bigger nail gun.
Henan is a landlocked province located in the central part of Mainland China.
It’s the third largest province in population with approximately 92 million people.
The pronunciation of Chinese words are as mysterious to people today as it was when Marco Polo roamed the sun-dappled willow lined canals of Suzhou.
The correct pronunciation of the province Henan is - and I’m going to give a rough phonetic approximation, is - “her narn”.
That’s -
“her” as in him & her.
And “naan” as in Indian soft bread.
I think the first tone is flat the second is a downward inflection.
CORRECTION: both tones are upward inflection. Thanks to singsangsong for this.
For Chinese language speakers, please correct me if I’m wrong and I’ll post the correction here.
Hope this helps.
no，both tone are upward inflection in chinese
@@singsangsong thanks for the correction.
You forgot to mention the coming Ghost Month aka 7th month of the Chinese Lunar Calendar that will start at July 29 and end on August 26. During the Ghost Month, it is advised not make new investments, start new projects, get married, buy new real estate or any other new stuff except necessities, not even have kids, or get a new job or else bad luck will stick to those endeavors.
So expect no government bailout for anyone at least until September.
Doesn't help too that East, Southeast, and South Asian countries believes on this bs month too.
Notice that Japanese, South Korean, and Chinese worldwide release of new cars never occurs in August, very few new AAA games titles are released in the ghost month.
It’s funny how he says Henan XD
It’s Huh Nan XD
Your data retrieving needs more work.
No developer is allowed to sell the property until the building is capped = All the structural work has been completed.
How much money is involved?
There is no economic activity when the city is locked down.
Many small and medium businesses will go broke and employees will have no income.
Freedom of movement and freedom of speech are under appreciated until they are taken away.
Oh god
FYI: Henan is spoken with a flat "a" he-nahn
Please use the right tones. It is Hé Nán, both with rising tones.
Doesnt help with corruption pocket lots of those millions too
Are you happy, you sound happy.
Dude I'm literally going to kill myself if I have to hear one more time how to improve my problem solving skills.
If you had better problem solving skills you could install an adblocker. 😉
@@thomas316 That won't block the ads that are included as part of the video by the video creator.
Fyi, Henan is mispronounced here, the stress should be on ‘nan’ instead
Hopefully this doesn't become another Tiannamen square
They'll make their problem everybody's problem. That's what they do.
Fuck.....you're probably right
That's what the US did in 1929 and 2008.
1:52 "CHIINA'S" 💀
This is a disaster years in the making. In China on average 78% of government income comes from well..... selling land to developer, so the land price and property price is heavily inflated. An average worker will take 40 years of salary to buy an apartament. The more they try to delaye the collepse, the harder the collepse will be. At this point of time a collepse and reform is not only inevitable, but also nessesery for long term.
Funny I saw this today while searching for Silicon Valley bank😅
Then add the entire sector of shadow banking to the mix.. mmh, it's gonna be fun the next 5 years.
When are you going to do a TLDR News Asia with news from both Koreas, China, India and Japan?
I am still waiting for the Lehman brothers moment since 2014.🤭🤭🤣🤣
it would be close, but i highly doubt it... CCP will never let it, as much as they can 0 COVID the nation
FYI Henan is pronounced more like "Huh? Naan".
Her-Nun
Omg his pronunciation of Henan
You might want to get pronunciation of Henan right.
Why do i feel like in the end this will be a way for china to implement its own central bank digital currency?
China can already print all the money they want. The currency is not the issue here.
they could use it while saying cashing is useless but honestly this will most likely hurt the digital currency. accounts were wiped- faith won't be the same.
@@postron5649 you have a very short understanding of economics
A digital currency is the perfect way to keep tabs on people. Convince the people banks can't be trusted and hand them their brand new leash.
@@ItsJoKeZ Theirs actually money in circulation in China with the same serial number, because they printed it twice, one batch for the banks and another for the rich and powerful