Currently in China myself. In this area, a five year old development near Shanghai, housing occupancy is about 10%, and real prices have halved. The official numbers are very different, but everyone knows this is the case. Kind of a pity, really it's a fairly nice planned development, but it was massively overbuilt. I buy the 3B number easily, I've seen this all over except Beijing and Shanghai (not to pretend I've been to all cities, but I've seen a lot). Oh yes, and they are still building. Why? A) most of the units are pre-purchand take 3-5 years to build from the point of purchase. B) Pumping the GDP. Like a third of the Chinese economy is construction, and they've already built all the actually useful infrastructure they seem inclined to build (for some reason replacing the water pipes and getting potable water just isn't happening), and when that construction dries up, there's a massive unemployment spike. Zeihan usually overstates demographic issues, but in this case he's likely understanding it. Weirdly, even though all the Chinese know this and aren't shy about talking to their friends about it, all the morons on XHS didn't hear about it when they were learning what "real Chinese people" live like, lol.
@@carlthor91 they have people that need housing. Except it out of price for them and/or no jobs in the development areas. Instead they have 5 families crammed in small apartments.
I think the issue is that so much of it was speculative. It wasn’t just people buying homes to live in, it was investors buying multiple properties, hoping to flip them for a quick profit. And then you have these ghost cities-entire developments with no one living in them. The bubble was bound to burst
And it’s not just the investors who are hurting. The Chinese economy as a whole is feeling the ripple effects. Real estate accounts for a huge part of their GDP, and now with all the big developers like Evergrande collapsing, it’s creating a lot of uncertainty. People’s savings are tied up in property, and now they’re stuck
It’s a real lesson in how things aren’t always what they seem. On the surface, it looked like everyone was making money, but the foundation was weak. And now people are losing their life savings. It's a perfect example of why you can’t put all your eggs in one basket
Real estate was seen as a safe bet, but it shows that no market is bulletproof. Even something that seems as stable as property can collapse if the fundamentals are shaky. People were so focused on the potential returns that they didn’t see the risks building up
You know, I was actually looking at the Chinese market a few years back. It seemed like a great opportunity, but I decided not to invest. That was thanks to my financial advisor. He helped me see the warning signs, the over leveraging, the dependence on constant growth in property prices. I’m really glad I took his advice
There's another, 4th part to this sh*tshow - millions of units were purchased before they were even built by customers who wanted to buy. So you have so many people who will never get their finished home, still having to pay a mortgage on a product they will never get.
If you only can lease the land in China what is the least comes up man gets repoed by the government do you still have to pay for the home that was never built??
@@Conrad-c1z - The Blue Ridge Mountains (part of the Appalachian Trail) would offer some stunning vistas! Inclines on the order of 500 FT in 1.5 miles, too, so gentle and beautiful.
New Zealand is a beautiful country! I had the opportunity to visit NZ for a week in the 2010s, and we did a whirlwind tour. I also visited Australia for 3 weeks and that was a beautiful country too. I would visit both countries again in a heartbeat! I was less-than-impressed with Fiji.
Yeah it's really a stacking problem of issues. Insane levels of our supply along with tofu dreg construction makes for stuff that is unsafe and not even worth the input materials.
@@hamzamahmood9565 government intervention pretty much. The evergrande bailout pretty much set the tone. By government standards their you either buy into the delusion or you go to jail for not paying on the apartment or condo that you're never going to get.
He didn't add in the fact that many international corporations have pulled their production out of China and closed factories, leading to massive spikes in unemployment for people who used to have very well paying foreign company factory jobs. An example would be when Samsung pulled out all their factories just after covid, it saw massive protests from the workers demanding that the government make them reopen the factories. So many of the better paying jobs that people could get have simply left the country while all this other stuff has been happening.
Well that's what you get when authoritarian governments take over your corporation as soon as it gets large enough to and then keeps intellectual property, machinery, and materials for themselves stealing them from corporations. On top of that individuals take intellectual property and remanufacture them somewhere else. They also finished products and rebrand them for themselves. Or they under sell the same people they are making things for, and with nearly identical products made on the same supply line with the same materials. China has been a horrible place to live for more than 300 years at this point. Look into your history. Read "things that are dark" by Ralph Townsend
I swear his pack must be like 50% sunglasses by volume. This whole situation reminds me of the food production issues the Chinese faced under Mao, where every step along the way from the farms to the processing facilities to the transportation, the workers were told they had to always produce more this month than last month, and so would just lie at every step. The farmers would deliver the same amount, but lie saying it was more, the processors had to report they were processing more weight so would add sand or saw dust to the flour, everyone knew everyone else was lying so they knew they had to keep lying themselves or get put up against the wall. In the end tens of millions of people starved to death. This time around, what’s the end result? All the private investments in these garbage condo units turn to nothing and all the local governments default on their debt? What will that actually mean though, who owns that debt, will the people protest after losing their savings?
I bet he just buys a couple sunglasses pairs on his way out to every trip... and yeah, people protest, but most protests are illegal and these take place in small numbers so no, there won't be another spontaneous civil "rebellion" like the one that closed the covid-era lockdowns that lasted three years thanks to Xi and his gang of profiteers in human suffering
Yes, the bottom line protests. But then that is what the PLA is for, not external aggressors, (who would want China really) but for keeping the PLA in power against any attempts to democratise and free the country. But the smarties are voting with their feet, and lucre, and fleeing if they can !
@@thesilverspanch I expect at some point some folks will decide to "go on a long walk together in the mountains". Or, perhaps better for everyone, China will split into a northern "pure socialist utopia" based around Beijing, a coastal mercantilezone based in Shanghai, and the western and mountain regions that never really fit into the Han world view. The
One complication in Chinese real estate is that no one 'owns' that land. The land is leased for 70 years, for example. So, there is little incentive to maintain the structures, especially if there are multiple owners. Even If a building was built well (big if), it would still require substantial upkeep in 10-30 years, ie roof, plumbing, power, foundation, exterior. No one is going to pay for that. Imagine what those properties will look like in 30 years -- Chinese Detroit.
I can't imagine China's GDP is nearly the size they claim based on realistic population numbers. I also don't buy their growth numbers based on the local economy. They are trying to export their way out of the problem, but even Europe is now taking a hard line on product dumping and countries around the world are getting fed up with the Chinese fishing fleet wiping out their stocks.
A couple years ago, a professor in the US decided to compare the growth in night lighting as seen from space compared to the reported GDP growth. In relatively free countries, the two matched pretty closely, in authoritarian countries, reported GDP was way higher than nighttime lighting. If you assume the night time lighting is the reality, China's GDP was only about 65% of what it reports... And China's response to this study? Order excessive additional lighting to be installed, just to try and fool this new method of measurement.
@@kayrosis5523 Ah, yes, the Chinese solution to everything. Kind of like spraying the terrain with green paint instead of planting grass (yes, they do this). Why fix the problem when you can just make it appear to be fine?
The CCP sets an and annual GDP target, they are met or exceeded without exception, and the GDP is reported. However, if you look at the individual GDP of the provinces, everyone of the provincial GDPs exceed the reported GDP by some degree.
@@AngelEconomics there are multiple ways of calculating GDP. All I am saying is if their true population is much lower, it is unlikely they have the reported GDP accurately.
Britain was partly bankrupt around 1760-1810 so they handed out land to their debtors in the colonies. One guy got a big chunk of land in NSW Australia. It took him years to get to Australia. He then found that the land was swamp and rocky forest. Then the Gold rush kicked in and the miners had to cross the swamp. He built a walkway and charges a toll. People noticed the wood did not rot so bought it for mine tunnel timbers. He went home rich. In china when this mess works out we will probably see local governments paying its debts with empty buildings and land. There will be no shortage of work and storage space for true innovators and those families that survive and rebuild when the party is gone.
@@u2beuser714I just figured it out- China is planning on saving its economy through the film industry! Entire unfinished, totally empty cities will make the perfect setting to film some post apocalyptic movies!
Yota - I bet you've never been to China and you are just a part of the sheeple criticising China at every opportunity. I have been fortunate to have travelled extensively in China and cities and regional areas. The quality of their work is excellent and is no worse than that in many western countries. Just because they can construct bridges, railways and buildings really quickly doesn't mean it is shoddy. It is a function of the number of people and resources they put into producing infrastructure. If their work is so shoddy please enlighten the audience with some specific examples of recently constructed infrastructure that is falling apart. If their work is so poor you should be able to come up with dozens of examples of major failures. I bet you can't. Better to stick to things you know something about.
Or, as Dr. Sarah Paine of Naval War College has put it, "Communists don't understand finance." You two should do a joint thing - would be great to watch!
Meanwhile I have been traveling and living in Europe and some places look more like Karachi with filthy shawarma stands, doggy barbershops and poorly maintained supermarkets and housing prices through the roof. It's worse than a population decline, it's begining of the end of a people. (I'm from the Levant before anyone acuses me of any stupid thing.
6:05 Correction: he says that half of the last 300 years of experience was under "Mongol occupation." He should have said Manchurian. The Mongol rule was in the 13-14th centuries (Yuan Dynasty).
I love your longer videos. I know they are a ton more work and you don't have 10+ minutes of thoughts on some subjects. But man it is just the most enjoyable format to listen to you describe things in detail like this (might just be jonesing for another book lol)
This is the secret to blowing up Zeihan’s channel. Dude would do well with a rare presentation video of a topic, and more common longer form, stream of thought video.
Peter, one more detail: Most of this speculative real estate is build only until primary structure. Meaning: No windows, floors, doors, or any utility, just bare concrete structure. Which is build substandard. We are talking about the price of land and crumbling structure, which is maybe 20-30% of the finished apartment they purchased. And it is up to 90 % of recent development in China...
Based on the infamous movie "The Big Short" I'm guessing the system has already passed the point of no return, however, people are going to pretend everything is normal and try to delay the CRASH as long as they can. One can pretend not falling until hitting the ground.
Like in 2008 the people in the system work to prop it up until there’s something unexpected and the house of cards tumbles, the longer the insiders are propping up the bigger the slide.
I’ve been reading that many Chinese refer to today’s economic situation as “economic garbage time”. Where garbage time is like in a basketball game where the outcome is no longer in doubt.
I remember in 2007 when I was working in real estate seeing people buy homes new from builders with the intention of selling before close of escrow to a new buyer for profit. The crash was so brutal and fast that I remember seeing a lot of these units foreclosed on with the builder plastic still on the carpet.
Most people find it difficult to handle a fall since they are used to bull markets, but if you know where to look and how to maneuver, you can make a size-able profit. Depending on how you intend to enter and exit, yes.
The enduring US stock market bull run evokes a mix of fear and excitement, presenting opportunities with insight, resulting in $780k gains in the past ten months, utilizing a portfolio advisor for a well-defined strategy.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
I'm been guided by "Melissa Terri Swayne" who is widely recognised for her competence and expertise in the financial market. She has a thorough understanding of portfolio diversification and is regarded as an authority in this field.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
If you've hiked in the US you are familiar with switchbacks. The Kiwis figured out that going straight up the mountain is more efficient so they provide stairs. The Scots are efficient as well, they just leave out the stairs and the trails go straight up/ down the mountain. Fun times when it rains!
It's a situation nearly at the point for the CCP to order the governments to step in, forgive everyone's debt, and seize all the land and buildings again, so they can sell them a SECOND time, lol.
They "own" nothing. The land is leased not purchased. If necessary, the central government will simply confiscate their property and pay them nothing for it. Communism is not an economic system -- it is a pseudo-feudal authoritarian political system. As Mao said, "power grows out of the barrel of a gun." Guess who has the guns?
I travelled to Shanghai for 15 years and what was amazing was how many incredible buildings were being built and how many of those buildings were empty. Everyone that I know in Shanghai has "multiple" pieces of real estate and thesis their primary investments. Scary what will or could happen to these investments - but this is an authoritarian government and when needed it will take over the real estate.
Thailand seems a fire hose of Chinese "and Russian" cash right now. It's been that way since the war started, money trying to escape both those countries as fast and as much as it can.
Basically, any country with a stable economy and banking sector that isn't likely to try and seize the cash or assets has been flooded by it. Before the covid spat between them, Australia had the most chines millionaires outside of China, simply because it has stable banks and there were easy ways for them to get their money out there through “Trade” deals.
Thailand has its own wrinkles re foreign ownership of real estate. Developers going bankrupt leads to foreigners seeing their condos seized by the creditors. Another wrinkle is that foreigners may not buy more than 49% of the development's floor area. If you own a unit in a development popular with foreigners, you may not be able to sell to a foreigner once that cap is reached. Many of the Russians and Chinese buy much more extravagant places than the locals have an appetite for or can afford. I know there was a proposed amendment to increase this to 75% but still limit voting rights to 49%.
@@Targe0Australia is an economic colony of China. They import low cost EVs solar panels, grid scale batteries, etc with zero tariffs since they have no manufacturing of their own left. They export raw materials like coal. Not a good solution.
Philippines caught some of the Chinese wave, all sorts of murky deals especially around gambling and resorts (pogo). So bad they even have fake Filipinas hawkin' the schemes (What's Happening Guo Hua Ping?)
*Momentary growth of the cities masked the start of the general population collapse.* Consider that, while the population decrease in the cities has become noticeable within the past five years, the depopulation of the countryside is what fueled the growth of the cities, and that stretches back a couple of decades. While the statisticians were in the growing cities, they ignored the collapse of rural life. Now, there's nowhere else the cadres can move people from, in order to prop up the population count, and guarantee their receipt of government funds. BTW, in the past 300 years, it was *the **_Manchus,_** not the Mongols.* (The Mongols were 800 years ago, starting in 1205 CE.)
Did you just say that the Chinese enjoy full employment...? I refuse to believe that. Real estate? That was a one-trick pony. Draining generational familial wealth is something that you only get to do one time. There's no more money to drain from the rural areas thus enriching the urban centers. Now the real estate values have cratered in the extreme leaving behind profound indebtedness. An export driven economy? It has to be. There is NO DOMESTIC DEMAND for goods and services to speak of. The majority of citizens lack the financial resources to spend as they might have just five years ago. The CCP has NO FIX.
You refuse to believe that because you dont like what you are hearing. Not facts but emotions. In addition, china is now importing tons upon tons of migrants from african and asian nations like bangladesh to drive up consumption
The Chinese took the West’s debt lead growth system and put it on steroids. They fell for the classic “a little alcohol is great, maybe a lot will be even better.”
I lived in China from 2003-2008. Occasionally I would get a copy of China Daily, the CCP paper. Different political viewpoint. Great sports page. I remember an article about 2 Chinese businessmen in one of the smaller Chinese towns, about 1/2 million people. Their private business employed 50K or more, went bankrupt and closed. The businessmen were arrested and sentenced to 20 years for the crime of harming social stability. The prosecutor showed they were aware of their business struggling for 2 years, and did not inform the local CCP/government in time for the CCP/government to have the company bought out by another Chinese firm. Instead the businessmen were selfish and harmed the towns social stability with unemployment.
"You can only sell land once" In China they don't "sell" land, they "lease" it, usually for terms of 50 or 70 years, so in theory they can sell out again. The problem is that the majority of land has been leased since 2012 when a serious of economic reforms were made meaning they can't sell it again until the 2060's, so functionally it's the same thing.
Yes, to add, though, it is the developer that leases the land, so if they sit on the property for 10 years before building and drag their feet, the units may only have (70yrs - Time To Market) years of lease left. Further, most buildings don't even last long enough to last the full lease due to "Chabuduo" and "Tofu Dreg" construction practices. Nobody really knows what happens at the end of the 70-year lease as it really hasn't happened, yet.
True, but communists doing what they do, they are now going back and changing the lease terms to shorter periods so the can recover their revenue stream since new leases are dead...
@@GeoScorpion - For commercial Real Estate, full depreciation in the USA is about 33 years. About 40% of all the available commercial real estate in the USA has been built since 1980. Too bad they weren't factories.
Isn't it the same everywhere ? When you "buy" land, you merely lease it from the country by paying property tax for the time you are alive, lets say for 50 years or less.
@@clippership8381 Ok, a bit to unpack. 'Depreciation' for tax purposes is separate from the actual depreciation of the building in the sense that it just falls over especially if the building is maintained. So, not sure what you're saying. I live in Massachusetts and welcome you to take tours of textile town buildings built in the 1800s repurposed to apartments and software start-ups, etc. ... I mean, yeah commercial needs in the 2020s isn't going to require the same interior specs as buildings built in the 1920s, but that is a question of repurposing limited land to more and more efficient uses. In China, buildings are falling down literally as they are being built or within less than a decade. I have terabytes of video on this because studying it is among the things I do for a living. So, tell me what the point was of your comment, and maybe I can speak more specifically to that.
Oversupply of property, high speed rail, EV factories, solar panels etc. financed by tons of debt. This is much worse than a Japanese style balance sheet recession.
Don't forget a radical proportion of people want to leave China. So the second they're allowed to leave the country a 100 million chinese under 40 will be leaving the country. Since Covid a lack of chinese emigration has been felt around the world. Turns out athiestic, educated, ultra conformist, hard working people who really want to live in a capitalist society are the best immigrants possible. Contrast that to highly religious lazy people who hate freedom, who don't confirm, aren't well educated.
Not only do I enjoy your commentary, but I have visited NZ a number of times and loved the place and people (and their beer). I’d forgotten how beautiful a place it is, especially the South Island. Going back there asap.
There have been rumors/reports that Chinese support for Cambodia’s recently initiated Funan Techo Canal Project has been delayed, diminished, or even ended. The PRC’s parlous economic condition may be a factor. Vietnam’s intense opposition to what would effectively be a widening of the Mekong Delta may also be having some effect. Cambodia’s Funan Techo Canal Project, if completed, would produce an additional artificial navigable Mekong distributary that would be wholly outside of Vietnam’s current border.
Let's remember whenever Peter refers to the fact of the economic collapse in China. The reference is discussing present day throughout the next 15-20-25 years. Thanks again P.Z. 👍
Peter continues to claim that Mexico has much higher-skilled labor than does China. As someone who has been doing international manufacturing for 40 years, I can state categorically that this is untrue. Mexico has cheap labor, but very limited skills are available, and vendor selection is super-critical in making anything there successfully. Also, they are adding capacity at a very slow pace. A typical Chinese company has a much higher level of technical sophistication; they also have tons of well-educated, serious engineers. Everyone I know is trying to move out of China. For the US, Mexico provides some opportunities for that, but it is nowhere near the panacea that Peter suggests it is.
Agree. There is a lot of youth in Mexico, and the educational system isn't too bad with a literacy rate of 95% in 2018, but it takes a great deal of technical engineering to build the necessary industries. It's on it's way though. The tech scene in the country is taking off with Mexico City, Guadalajara, and Tijuana are becoming major tech hubs, with salaries reaching up to $100,000 for senior roles.
Free public education ends at eighth grade. The government vies with the cartels for regional control. Weird property laws. A pretend marxist revolutionary heritage. Up to a fifth of the country fled to the US for a better life since 1965. I'd say they have a few issues to resolve before becoming a manufacturing powerhouse. Their new Presidenta has stated Mexico and the US are like an old couple that need a divorce.
I would like a video on how Peter goes about his trips. Why? How he search after the hikes. How he plans them. What are the red flags? Thank you for the perspectives!
It was 40 million who died of starvation during Mao's "Gtreat Leap Forward" and that's the number admitted by the Communist Chinese government, many western researchers estimate it may be as high as 100 million who starved to death. I've never heard ANYONE give a number so low as 20 million.
We did the Kepler Track on our honeymoon in 2005. Loved it. We actually used "Kepler" for our oldest son's middle name. Did you like the stairs? I thought those were awesome. Great video. Keep up the good work!
Yes there is...there's two main cabin areas, plus a few spots you can setup a tent. I did it in two days one night which was tough, usually you do 2 or three nights. Or more if taking it easy.
@killjoyredux8361 What was tough about the 2-1 approach? Was it just a lot of miles/hours, or something else that made it challenging? And would you say the entire route is worth it, or would you recommend one part but not another? Cheers! :)
Most of the housing units have been purchased with a mortgage. Speculators wanted to benefit from the leverage (put 25% down and the profits are 4x relative to paying cash). The banks are owed 75% of the purchase price. As prices fall more than 25%, selling a property would mean recognizing that all of your downpayment has evaporated AND it means you have to find cash to pay the bank to pay of the loan that was not covered by the sale of the property. There is no bankruptcy option in China to get out of a bad house deal. If your property is sold, you are stuck owning the remaining debt for life. It gets passed down to your kids. This drop in housing prices will damage the banks, but it wipes out generations of wealth for the speculators. That sort of change it wealth for a large portion of the population leads to revolts.
Maybe, but now I don’t trust him. Once you discover someone’s a TDS sufferer they’re just inherently unhinged on anything related to Trump. The connection isn’t necessarily apparent, so it’s difficult to recognize politicized areas. Hence unavoidably undependable analysis. I’m mostly listening to this clip to confirm whether Peter’s retained any value for anything besides entertainment.
Those that could get their money out of the country -- the elite and influential -- bought many properties in stable democracies like the US, Canada, Australia. The cost of housing from Vancouver to San Diego rose significantly due in part to this capital flight.
It’s like when u have reached the end of a Monopoly game and the players that are losing are attempting to sell off their under developed or mortgaged properties just to survive
Local governments lie to their federal government about the population to receive more money then corrupt local government officials pocket said money for themselves.
2034? OK, he said it. He did state a caveat. the data is soooo poor it's hard to know. But then he stated that 2034 is an outer boundary on the time scale. Time is the arbiter of truth. 9 years and counting.
Peter has been predicting that China has at most ten years left since 2014. He's not wrong about the structural problems, and he's probably not wrong about how it'll end, but I take his timeframe with a massive grain of salt.
He said it? So? You take that and then look for more opinions. This Is not about proving anyone wrong, so you can shine as some sort of "dick"? Ten years is a very short time, and that time could be shorter (or longer). Is the event not the date that matters, and that event mixes with other events and that produces yet another video LOL... Keep waiting.. 9 years and waiting... so you can be better than some drunk hiker with a team of analyst, a go pro camera and a bottle of vodka in his backpack. . Good job!!!!!
Just look at Russia and more importantly North Korea as well for possible future of China. Dysfunctional states and govts seem to be able to last quite a long time. But it's never any good for the common person
You need to snug up those load lifter straps a bit. I don't know how you can stand your bag jiggling and wiggling back there like that. Thanks for another good video.
excellent analysis and very detailed. could only add that China recapitalised the banking system with AMCs and FX Earninga, but then never wrote down the debt.. and that when unwinds those it will shrink the money supply (as it printed money when it received those fx reserves)..
Peter’s videos are always interesting, and more than that, whether one feels enlightened, agrees with his assessments, or thinks he’s full of bananas, I must say that the comments section NEVER disappoints! 👍🏻
The trolls seem to misunderstand the fact that an opinion is just that. In this case, it is data backed and enlightening. The autocracies hate this free speech. I love the comments section too!
Meanwhile, in the West, and especially in English-speaking countries. There is a housing shortage stifling economic growth and feeding into political and social unrest.
But fortunately in the West we don't have 'tiered cities', so if you can't find employment in your current city or you feel housing costs are too high, you can move to another city with lower-cost housing and/or more employment opportunities without government restrictions. And as for the USA specifically, its not that hard to switch job fields (relative to China) so with a little bit of 'due diligence' and 'skills transfer' a person can find new employment. Free market economics, not centrally-planned like in China.
Communism, even the military dictatorship type, is based on planned sufficiency, levelling UP, though corruption and incompetence frequently cause failure. Capitalism, although theoretically based on consumption, is actually based on INSUFFICIENCY and wage suppression; for example, the federal minimum wage has not increased since set in the 1990s. IF further proof were needed, the majority of Americans are now living from paycheck to paycheck and a slightly elevated inflation for a mere two years has caused family financial disasters, frustration and anger that has led to political chaos. In these circumstances, people vote for ANYONE who admits the problems and promises to fix them. No BILLIONAIRE is motivated to fix the system that makes them RICH.
tbh, when the ccp started talking about "stimulating domestic consumption", i knew it's over because of the unbelievable disconnect between their gov's view and reality
@tk80mufa5 I see what u mean, but when it comes to geopolitics, it is very risky or dare i say wrong to compare countries because there are no 2 with totally shared history/context, so comparisons can make one sort of lie to themselves. that's imo of course
@@doomy330 agreed, maybe i should have mentioned examples like gov incentives/subsidies for EVs / green tech, when often the demand isn't there, etc. Btw, of course i'm glad not to live in China
@@kjell744 When you say "fine" you mean one look from an western safety inspector would make his hair turn white? Don't pretend it's only some construction in China that is tofu quality, compared to proper building standards the Chinese might as well be using mud. As for the media, Chinese media only shows the couple of OK looking places over and over to us in the west, they hide all the starving peasants living in squalor.
The housing market is inflated and oversaturated with homes being on the market with astronomical price tags just stagnant for months. It is very clear that our generation will be likely one of the most devastating bubble pops in modern history. Seeking best possible ways to grow 250k into $1m+ and get a good house for retirement, I'm 54.
Safest approach i feel to go about it is to diversify investments. By spreading investments across different asset classes, like gold, silver, real estate, and international stocks, they can reduce the impact of a market meltdown. its important to seek the guidance of an expert
I’m closing in on retirement, and I have benefitted much from using a financial advisor. I didn’t really start early, so I knew the compound interest of index fund investing would not work for me. Funny how I pulled in over 80% profit than some of my peers who have been investing for many years. Maybe you should consider this too
Finding financial advisors like Lisa Grace Myer who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
You're going to have to look it up yourself if you want specifics. He does make a few admissions in the video that he looked at a variety of sources beyond official CCP data but they all varied from that data so some of what he says is somewhere between a 'best estimate' and a wild-a$$-guess.
Trump's border wall will suddenly turn from being overrun by Central/South Americans to Chinese people. 😉 If Xi is still in power I could see an invasion of Taiwan just to instill nationalism and divert attention from the economic collapse.
You can see this to a lesser degree in Viet Nam as well. I was looking at HUGE neighborhoods, (in theory, really, really nice houses) that were just shells. The other concrete was build, the facade was built, but there was no windows, carpet,furniture, etc. BUT there rows upon rows of these houses, just empty. Ghost suburbs.
There is also the massive manufacturing and employment infrastructure that is involved in building all this real-estate and involved in manufacturing the raw materials and building supplies that are used to build these things. If no more housing is needed...there goes all the construction employment and all the employment in building materials.
Don't forget that a good chunk of these people started payments before the building was even finished, then the companies went under. So now you have a ton of people who owe on a loan for a product that doesn't even exist lol.
Changing times ahead Peter. AGI must change a few metrics. Great too see you back in NZ, the cheese yum. Your doing some serious miles there. It is a very beautiful place to be. Must come to Au, a couple of decent Treks in this neck of the woods. you may like. Cheers S 😎
I thinkthat was Peter's best explanation and summary yet. I am still stunned at the variety of hydrated land figures in New Zealand. But the land is sterile for animals. There are no predators. Bird life is sparce. Add to that the fact that New Zealand will not allow Americans to buy real estate there, or any ex-pat activity. But the whole country is similar to China in that they need 1000s of more dentists, and NOW!
The building sector in Australia has turned to utter corruption, houses are so poorly built now and are so expensive its an utter scam, so sad to see whats happening here
![Lp. Сердце Вселенной #60 РОЖДЕНИЕ ЛОЛОЛОШКИ [Финал] • Майнкрафт](http://i.ytimg.com/vi/YoR0pAV9FVQ/mqdefault.jpg)
Currently in China myself. In this area, a five year old development near Shanghai, housing occupancy is about 10%, and real prices have halved. The official numbers are very different, but everyone knows this is the case. Kind of a pity, really it's a fairly nice planned development, but it was massively overbuilt. I buy the 3B number easily, I've seen this all over except Beijing and Shanghai (not to pretend I've been to all cities, but I've seen a lot).
Oh yes, and they are still building. Why? A) most of the units are pre-purchand take 3-5 years to build from the point of purchase. B) Pumping the GDP. Like a third of the Chinese economy is construction, and they've already built all the actually useful infrastructure they seem inclined to build (for some reason replacing the water pipes and getting potable water just isn't happening), and when that construction dries up, there's a massive unemployment spike.
Zeihan usually overstates demographic issues, but in this case he's likely understanding it. Weirdly, even though all the Chinese know this and aren't shy about talking to their friends about it, all the morons on XHS didn't hear about it when they were learning what "real Chinese people" live like, lol.
A friend of mine, traveled there 8 years ago, and told me about all the developments, that were built, and not occupied.
@@carlthor91 they have people that need housing. Except it out of price for them and/or no jobs in the development areas. Instead they have 5 families crammed in small apartments.
sounds made up
Did you mean understating it?
@@admthrawnuru Very interesting "on the ground" update from you. Thanks 👍🏼.
I think the issue is that so much of it was speculative. It wasn’t just people buying homes to live in, it was investors buying multiple properties, hoping to flip them for a quick profit. And then you have these ghost cities-entire developments with no one living in them. The bubble was bound to burst
And it’s not just the investors who are hurting. The Chinese economy as a whole is feeling the ripple effects. Real estate accounts for a huge part of their GDP, and now with all the big developers like Evergrande collapsing, it’s creating a lot of uncertainty. People’s savings are tied up in property, and now they’re stuck
It’s a real lesson in how things aren’t always what they seem. On the surface, it looked like everyone was making money, but the foundation was weak. And now people are losing their life savings. It's a perfect example of why you can’t put all your eggs in one basket
Real estate was seen as a safe bet, but it shows that no market is bulletproof. Even something that seems as stable as property can collapse if the fundamentals are shaky. People were so focused on the potential returns that they didn’t see the risks building up
You know, I was actually looking at the Chinese market a few years back. It seemed like a great opportunity, but I decided not to invest. That was thanks to my financial advisor. He helped me see the warning signs, the over leveraging, the dependence on constant growth in property prices. I’m really glad I took his advice
You worked with a Cfa? I’ve been thinking about getting one, especially now with all the uncertainty around globalization. Who do you work with?
There's another, 4th part to this sh*tshow - millions of units were purchased before they were even built by customers who wanted to buy. So you have so many people who will never get their finished home, still having to pay a mortgage on a product they will never get.
If you only can lease the land in China what is the least comes up man gets repoed by the government
do you still have to pay for the home that was never built??
@@TheSpiderworks - Good question, it's never been answered in a practical way at this scale. So your guess is as good as anyone's.
How does the dooms day economy and colapsed demographics play on the impending invasion of Taiwan?
@@jamiegunn4900 Are you seriously asking? Because having a functional economy's sorta important if you're gonna start a world war.
“70% percent of private savings is in real estate”
New Zealand tourism owes you alot.
Peter should walk the Bibbulmun Track
And Colorado. May I request Glacier national park next please?
I want to go to NewZeland 😊
@@Conrad-c1z - The Blue Ridge Mountains (part of the Appalachian Trail) would offer some stunning vistas! Inclines on the order of 500 FT in 1.5 miles, too, so gentle and beautiful.
New Zealand is a beautiful country! I had the opportunity to visit NZ for a week in the 2010s, and we did a whirlwind tour. I also visited Australia for 3 weeks and that was a beautiful country too. I would visit both countries again in a heartbeat! I was less-than-impressed with Fiji.
One issue not mentioned is many Chinese banks restrict the ability of depositors to withdraw he money in their accounts.
They aren’t letting international companies withdraw funds either 😮
You forgot to throw in that a majority of these apartments were built really really badly 🤔
literal ghost cities with 1000s and 1000s of shell skyscrapers that dont even have windows
Yeah it's really a stacking problem of issues. Insane levels of our supply along with tofu dreg construction makes for stuff that is unsafe and not even worth the input materials.
How tf has their housing market not crashed yet?
@@hamzamahmood9565 government intervention pretty much. The evergrande bailout pretty much set the tone. By government standards their you either buy into the delusion or you go to jail for not paying on the apartment or condo that you're never going to get.
Tofu dreg?
He didn't add in the fact that many international corporations have pulled their production out of China and closed factories, leading to massive spikes in unemployment for people who used to have very well paying foreign company factory jobs.
An example would be when Samsung pulled out all their factories just after covid, it saw massive protests from the workers demanding that the government make them reopen the factories.
So many of the better paying jobs that people could get have simply left the country while all this other stuff has been happening.
The Samsung factories were producing Samsung phones. Nobody was buying them any more in China.
Thanks for mentioning that (employment migration)
Well that's what you get when authoritarian governments take over your corporation as soon as it gets large enough to and then keeps intellectual property, machinery, and materials for themselves stealing them from corporations.
On top of that individuals take intellectual property and remanufacture them somewhere else. They also finished products and rebrand them for themselves. Or they under sell the same people they are making things for, and with nearly identical products made on the same supply line with the same materials.
China has been a horrible place to live for more than 300 years at this point. Look into your history. Read "things that are dark" by Ralph Townsend
We're the only idiots who insist on staying. I'm looking at you US tech sector!
And they just undermined our AI platform with Temu-AI….
I swear his pack must be like 50% sunglasses by volume.
This whole situation reminds me of the food production issues the Chinese faced under Mao, where every step along the way from the farms to the processing facilities to the transportation, the workers were told they had to always produce more this month than last month, and so would just lie at every step. The farmers would deliver the same amount, but lie saying it was more, the processors had to report they were processing more weight so would add sand or saw dust to the flour, everyone knew everyone else was lying so they knew they had to keep lying themselves or get put up against the wall. In the end tens of millions of people starved to death. This time around, what’s the end result? All the private investments in these garbage condo units turn to nothing and all the local governments default on their debt? What will that actually mean though, who owns that debt, will the people protest after losing their savings?
I bet he just buys a couple sunglasses pairs on his way out to every trip... and yeah, people protest, but most protests are illegal and these take place in small numbers so no, there won't be another spontaneous civil "rebellion" like the one that closed the covid-era lockdowns that lasted three years thanks to Xi and his gang of profiteers in human suffering
Yeah stop thinking china is a communist country.
It maybe an autocratic central planned economy but it’s not the Soviet Union
Yes, the bottom line protests. But then that is what the PLA is for, not external aggressors, (who would want China really) but for keeping the PLA in power against any attempts to democratise and free the country. But the smarties are voting with their feet, and lucre, and fleeing if they can !
@@thesilverspanch I expect at some point some folks will decide to "go on a long walk together in the mountains". Or, perhaps better for everyone, China will split into a northern "pure socialist utopia" based around Beijing, a coastal mercantilezone based in Shanghai, and the western and mountain regions that never really fit into the Han world view.
The
Most of that enormous surplus is also Tofu Dreg construction. It isn't exactly habitable
One complication in Chinese real estate is that no one 'owns' that land. The land is leased for 70 years, for example. So, there is little incentive to maintain the structures, especially if there are multiple owners. Even If a building was built well (big if), it would still require substantial upkeep in 10-30 years, ie roof, plumbing, power, foundation, exterior. No one is going to pay for that. Imagine what those properties will look like in 30 years -- Chinese Detroit.
In context of millions of young people having spent years studying in the west where your children inherit your property.
I can't imagine China's GDP is nearly the size they claim based on realistic population numbers. I also don't buy their growth numbers based on the local economy. They are trying to export their way out of the problem, but even Europe is now taking a hard line on product dumping and countries around the world are getting fed up with the Chinese fishing fleet wiping out their stocks.
A couple years ago, a professor in the US decided to compare the growth in night lighting as seen from space compared to the reported GDP growth. In relatively free countries, the two matched pretty closely, in authoritarian countries, reported GDP was way higher than nighttime lighting. If you assume the night time lighting is the reality, China's GDP was only about 65% of what it reports... And China's response to this study? Order excessive additional lighting to be installed, just to try and fool this new method of measurement.
GDP is based on domestic production, not on sales or revenue.
@@kayrosis5523 Ah, yes, the Chinese solution to everything. Kind of like spraying the terrain with green paint instead of planting grass (yes, they do this). Why fix the problem when you can just make it appear to be fine?
The CCP sets an and annual GDP target, they are met or exceeded without exception, and the GDP is reported. However, if you look at the individual GDP of the provinces, everyone of the provincial GDPs exceed the reported GDP by some degree.
@@AngelEconomics there are multiple ways of calculating GDP. All I am saying is if their true population is much lower, it is unlikely they have the reported GDP accurately.
Britain was partly bankrupt around 1760-1810 so they handed out land to their debtors in the colonies. One guy got a big chunk of land in NSW Australia. It took him years to get to Australia. He then found that the land was swamp and rocky forest. Then the Gold rush kicked in and the miners had to cross the swamp. He built a walkway and charges a toll. People noticed the wood did not rot so bought it for mine tunnel timbers. He went home rich.
In china when this mess works out we will probably see local governments paying its debts with empty buildings and land. There will be no shortage of work and storage space for true innovators and those families that survive and rebuild when the party is gone.
not to mention that their construction is so shoddy everything is falling apart.
Its by design because they arent meant to be lived in
@@u2beuser714I just figured it out- China is planning on saving its economy through the film industry! Entire unfinished, totally empty cities will make the perfect setting to film some post apocalyptic movies!
Have you been to china!?
@@chrisspencer6502 no. have you been to the moon? do you know anything about the moon?
Yota - I bet you've never been to China and you are just a part of the sheeple criticising China at every opportunity. I have been fortunate to have travelled extensively in China and cities and regional areas. The quality of their work is excellent and is no worse than that in many western countries. Just because they can construct bridges, railways and buildings really quickly doesn't mean it is shoddy. It is a function of the number of people and resources they put into producing infrastructure. If their work is so shoddy please enlighten the audience with some specific examples of recently constructed infrastructure that is falling apart. If their work is so poor you should be able to come up with dozens of examples of major failures. I bet you can't. Better to stick to things you know something about.
I watch your videos on 2X. Got so engrossed in your analysis I forgot I was watching it sped up. I was impressed at how fast you were hiking! 😂
Same - entertainment BS is not worth more time.
Or, as Dr. Sarah Paine of Naval War College has put it, "Communists don't understand finance." You two should do a joint thing - would be great to watch!
Title it with that quote, subtitle it with PZ's quote from this video: "Mao Was A F**k". I'd be there.
You could add Lei from Lei’s real talk to that mix, that’s a show I’d pay to see.
@@HH-jq2gx Lei is gold !
And modern China is still Marxist how
Meanwhile I have been traveling and living in Europe and some places look more like Karachi with filthy shawarma stands, doggy barbershops and poorly maintained supermarkets and housing prices through the roof. It's worse than a population decline, it's begining of the end of a people. (I'm from the Levant before anyone acuses me of any stupid thing.
I'm glad you can say it because if I did I would be shouted down as a xenophobic, white supremacist, conspiracy theorist
China's population after crash will still be greater than America's or any other western nations population 😂
6:05 Correction: he says that half of the last 300 years of experience was under "Mongol occupation." He should have said Manchurian. The Mongol rule was in the 13-14th centuries (Yuan Dynasty).
Mongol/Manchu, potato/potahto
Thank you!
He didn't say the last 300. He said out of a total of 300 years of unification, and implied those 300 years were broken up
He makes up all statistics.
No. He said china has only been unified for 300 years, not the last 300 contiguous years, and that half of that time it was under mongol rule.
Bottom line: the housing is worthless and the people's money is all gone :(
And yet, they keep sheeping on...
Go ahead and laugh... But what do you think America is going to look like going into the third and fourth Trump administrations?
@@VladimirPutin-p3t no one is laughing and what do you think Russia already looks like now
@@VladimirPutin-p3tChina doesn't have that many privately owned firearms, the USA does
@@VladimirPutin-p3tthird and fourth administrations? Only with your help, comrade 😂
I love your longer videos. I know they are a ton more work and you don't have 10+ minutes of thoughts on some subjects. But man it is just the most enjoyable format to listen to you describe things in detail like this (might just be jonesing for another book lol)
This is the secret to blowing up Zeihan’s channel.
Dude would do well with a rare presentation video of a topic, and more common longer form, stream of thought video.
This is not even an in detail description.
For a college essay, I could triple the length and still leave some things undiscussed...
Peter, one more detail: Most of this speculative real estate is build only until primary structure. Meaning: No windows, floors, doors, or any utility, just bare concrete structure. Which is build substandard. We are talking about the price of land and crumbling structure, which is maybe 20-30% of the finished apartment they purchased. And it is up to 90 % of recent development in China...
Based on the infamous movie "The Big Short" I'm guessing the system has already passed the point of no return, however, people are going to pretend everything is normal and try to delay the CRASH as long as they can. One can pretend not falling until hitting the ground.
More like the CCP will rigorously enforce the line that everything is normal or improving, kicking the can down the road, but a dead end is coming up.
Ooh. I like that. "One can predict not falling until hitting the ground."
Like in 2008 the people in the system work to prop it up until there’s something unexpected and the house of cards tumbles, the longer the insiders are propping up the bigger the slide.
But as China has so much control they can delay the crash significantly... It is now more like a slow moving landslide.
I’ve been reading that many Chinese refer to today’s economic situation as “economic garbage time”. Where garbage time is like in a basketball game where the outcome is no longer in doubt.
I remember in 2007 when I was working in real estate seeing people buy homes new from builders with the intention of selling before close of escrow to a new buyer for profit. The crash was so brutal and fast that I remember seeing a lot of these units foreclosed on with the builder plastic still on the carpet.
Most people find it difficult to handle a fall since they are used to bull markets, but if you know where to look and how to maneuver, you can make a size-able profit. Depending on how you intend to enter and exit, yes.
The enduring US stock market bull run evokes a mix of fear and excitement, presenting opportunities with insight, resulting in $780k gains in the past ten months, utilizing a portfolio advisor for a well-defined strategy.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
I'm been guided by "Melissa Terri Swayne" who is widely recognised for her competence and expertise in the financial market. She has a thorough understanding of portfolio diversification and is regarded as an authority in this field.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
If you've hiked in the US you are familiar with switchbacks. The Kiwis figured out that going straight up the mountain is more efficient so they provide stairs. The Scots are efficient as well, they just leave out the stairs and the trails go straight up/ down the mountain. Fun times when it rains!
Correct. We don't really do switchbacks down under. I remember experiencing them in Zion... A lot of walking for not a lot of gain
China's shadow banking system is a mess. Working out who owes what with what collateral is a nightmare
It's a situation nearly at the point for the CCP to order the governments to step in, forgive everyone's debt, and seize all the land and buildings again, so they can sell them a SECOND time, lol.
CCP: “our shadow banking system will allow us to surpass and replace the USD! Mwahahaha!”
USA: “yeah but like our money’s real.”
They "own" nothing. The land is leased not purchased. If necessary, the central government will simply confiscate their property and pay them nothing for it. Communism is not an economic system -- it is a pseudo-feudal authoritarian political system. As Mao said, "power grows out of the barrel of a gun." Guess who has the guns?
I travelled to Shanghai for 15 years and what was amazing was how many incredible buildings were being built and how many of those buildings were empty. Everyone that I know in Shanghai has "multiple" pieces of real estate and thesis their primary investments. Scary what will or could happen to these investments - but this is an authoritarian government and when needed it will take over the real estate.
Or at least they claim to own multiples. Many did get in early though or were 'gifted' apartments for land decades ago.
Thailand seems a fire hose of Chinese "and Russian" cash right now. It's been that way since the war started, money trying to escape both those countries as fast and as much as it can.
Basically, any country with a stable economy and banking sector that isn't likely to try and seize the cash or assets has been flooded by it.
Before the covid spat between them, Australia had the most chines millionaires outside of China, simply because it has stable banks and there were easy ways for them to get their money out there through “Trade” deals.
Thailand has its own wrinkles re foreign ownership of real estate. Developers going bankrupt leads to foreigners seeing their condos seized by the creditors. Another wrinkle is that foreigners may not buy more than 49% of the development's floor area. If you own a unit in a development popular with foreigners, you may not be able to sell to a foreigner once that cap is reached. Many of the Russians and Chinese buy much more extravagant places than the locals have an appetite for or can afford. I know there was a proposed amendment to increase this to 75% but still limit voting rights to 49%.
@@Targe0 What you said is not true there are tons of billionairs flooding the UAE , a dictatorship as of the last statistics by henley and partners.
@@Targe0Australia is an economic colony of China. They import low cost EVs solar panels, grid scale batteries, etc with zero tariffs since they have no manufacturing of their own left. They export raw materials like coal. Not a good solution.
Philippines caught some of the Chinese wave, all sorts of murky deals especially around gambling and resorts (pogo). So bad they even have fake Filipinas hawkin' the schemes (What's Happening Guo Hua Ping?)
"unwind everything he had done while leaving his poster on the walls" - dude, my family is looking at me wondering why I am laughing out loud :)
Interesting. Once I got passed the fact I could not reach in and straighten the sunglasses, it was enlightening.
The sunglasses were perfect. Peter just has crooked eyes.
*Momentary growth of the cities masked the start of the general population collapse.* Consider that, while the population decrease in the cities has become noticeable within the past five years, the depopulation of the countryside is what fueled the growth of the cities, and that stretches back a couple of decades. While the statisticians were in the growing cities, they ignored the collapse of rural life. Now, there's nowhere else the cadres can move people from, in order to prop up the population count, and guarantee their receipt of government funds. BTW, in the past 300 years, it was *the **_Manchus,_** not the Mongols.* (The Mongols were 800 years ago, starting in 1205 CE.)
Yeah. Recent travel vloggers in Shanhai, Beijing show public ped/retail/entertainment spaces that are very uncrowded, even in good weather.
What he was saying is that China was really centralized for only 300 years and half was under Mongol rule... yes, in the 14th century.
Your synthesis capacity is impressive!
Did you just say that the Chinese enjoy full employment...? I refuse to believe that. Real estate? That was a one-trick pony. Draining generational familial wealth is something that you only get to do one time. There's no more money to drain from the rural areas thus enriching the urban centers. Now the real estate values have cratered in the extreme leaving behind profound indebtedness. An export driven economy? It has to be. There is NO DOMESTIC DEMAND for goods and services to speak of. The majority of citizens lack the financial resources to spend as they might have just five years ago. The CCP has NO FIX.
they "enjoyed" ... 30 years ago
You refuse to believe that because you dont like what you are hearing. Not facts but emotions. In addition, china is now importing tons upon tons of migrants from african and asian nations like bangladesh to drive up consumption
That is an apt recapitulation of Mr. Zeihan’s analysis.
The Chinese took the West’s debt lead growth system and put it on steroids. They fell for the classic “a little alcohol is great, maybe a lot will be even better.”
Geopolitics straight out of Middle Earth, fantastic.
Give us YOUR take Jazer, and give us a chance to sneer at your ideas.
I lived in China from 2003-2008. Occasionally I would get a copy of China Daily, the CCP paper. Different political viewpoint. Great sports page. I remember an article about 2 Chinese businessmen in one of the smaller Chinese towns, about 1/2 million people. Their private business employed 50K or more, went bankrupt and closed. The businessmen were arrested and sentenced to 20 years for the crime of harming social stability.
The prosecutor showed they were aware of their business struggling for 2 years, and did not inform the local CCP/government in time for the CCP/government to have the company bought out by another Chinese firm. Instead the businessmen were selfish and harmed the towns social stability with unemployment.
Love that you stopped mentally for a moment to enjoy the cascading spring. “Work / Life balance” at it’s best!
If this guy isn’t a CIA asset then I’m Dr Seuss.
"You can only sell land once"
In China they don't "sell" land, they "lease" it, usually for terms of 50 or 70 years, so in theory they can sell out again. The problem is that the majority of land has been leased since 2012 when a serious of economic reforms were made meaning they can't sell it again until the 2060's, so functionally it's the same thing.
Yes, to add, though, it is the developer that leases the land, so if they sit on the property for 10 years before building and drag their feet, the units may only have (70yrs - Time To Market) years of lease left. Further, most buildings don't even last long enough to last the full lease due to "Chabuduo" and "Tofu Dreg" construction practices. Nobody really knows what happens at the end of the 70-year lease as it really hasn't happened, yet.
True, but communists doing what they do, they are now going back and changing the lease terms to shorter periods so the can recover their revenue stream since new leases are dead...
@@GeoScorpion - For commercial Real Estate, full depreciation in the USA is about 33 years. About 40% of all the available commercial real estate in the USA has been built since 1980. Too bad they weren't factories.
Isn't it the same everywhere ? When you "buy" land, you merely lease it from the country by paying property tax for the time you are alive, lets say for 50 years or less.
@@clippership8381 Ok, a bit to unpack. 'Depreciation' for tax purposes is separate from the actual depreciation of the building in the sense that it just falls over especially if the building is maintained. So, not sure what you're saying.
I live in Massachusetts and welcome you to take tours of textile town buildings built in the 1800s repurposed to apartments and software start-ups, etc. ... I mean, yeah commercial needs in the 2020s isn't going to require the same interior specs as buildings built in the 1920s, but that is a question of repurposing limited land to more and more efficient uses.
In China, buildings are falling down literally as they are being built or within less than a decade. I have terabytes of video on this because studying it is among the things I do for a living.
So, tell me what the point was of your comment, and maybe I can speak more specifically to that.
Nice summary with this one.
I remember in about 1989 I heard that China had a 50% savings rate as a society. Somebody found a way to take it.
Thanks for your frequent updates on this important matter Sir.
Oversupply of property, high speed rail, EV factories, solar panels etc. financed by tons of debt. This is much worse than a Japanese style balance sheet recession.
Don't forget a radical proportion of people want to leave China. So the second they're allowed to leave the country a 100 million chinese under 40 will be leaving the country. Since Covid a lack of chinese emigration has been felt around the world. Turns out athiestic, educated, ultra conformist, hard working people who really want to live in a capitalist society are the best immigrants possible. Contrast that to highly religious lazy people who hate freedom, who don't confirm, aren't well educated.
@@h_meow don't forget they aren't able to maintain or service what they have built
Not only do I enjoy your commentary, but I have visited NZ a number of times and loved the place and people (and their beer). I’d forgotten how beautiful a place it is, especially the South Island. Going back there asap.
You got that right. Rob Roy glacier here I come.
Colorado is closer, and the sheep there don’t live in constant fear. 😁
Will there be a collapse of the Belt and Road Initiatives soon?
There have been rumors/reports that Chinese support for Cambodia’s recently initiated Funan Techo Canal Project has been delayed, diminished, or even ended. The PRC’s parlous economic condition may be a factor. Vietnam’s intense opposition to what would effectively be a widening of the Mekong Delta may also be having some effect. Cambodia’s Funan Techo Canal Project, if completed, would produce an additional artificial navigable Mekong distributary that would be wholly outside of Vietnam’s current border.
Let's remember whenever Peter refers to the fact of the economic collapse in China. The reference is discussing present day throughout the next 15-20-25 years. Thanks again P.Z. 👍
The real estate collapse isn't coming.
It's been going on for a couple of years already...
Hi Peter
Thanks for promoting our wonderful New Zealand:)
Peter continues to claim that Mexico has much higher-skilled labor than does China. As someone who has been doing international manufacturing for 40 years, I can state categorically that this is untrue. Mexico has cheap labor, but very limited skills are available, and vendor selection is super-critical in making anything there successfully. Also, they are adding capacity at a very slow pace. A typical Chinese company has a much higher level of technical sophistication; they also have tons of well-educated, serious engineers. Everyone I know is trying to move out of China. For the US, Mexico provides some opportunities for that, but it is nowhere near the panacea that Peter suggests it is.
Then you should start your own channel and talk about it.
Agree. There is a lot of youth in Mexico, and the educational system isn't too bad with a literacy rate of 95% in 2018, but it takes a great deal of technical engineering to build the necessary industries. It's on it's way though. The tech scene in the country is taking off with Mexico City, Guadalajara, and Tijuana are becoming major tech hubs, with salaries reaching up to $100,000 for senior roles.
Free public education ends at eighth grade. The government vies with the cartels for regional control. Weird property laws. A pretend marxist revolutionary heritage. Up to a fifth of the country fled to the US for a better life since 1965. I'd say they have a few issues to resolve before becoming a manufacturing powerhouse. Their new Presidenta has stated Mexico and the US are like an old couple that need a divorce.
Kepler! That sunset by lake Manipuri will be with me to the end of my days.
Sponsored by New Zealand tourism board
I would like a video on how Peter goes about his trips. Why? How he search after the hikes. How he plans them. What are the red flags?
Thank you for the perspectives!
It was 40 million who died of starvation during Mao's "Gtreat Leap Forward" and that's the number admitted by the Communist Chinese government, many western researchers estimate it may be as high as 100 million who starved to death. I've never heard ANYONE give a number so low as 20 million.
Good for you
I think he was referring to the cultural revolution and not the great leap forward. Same dear leader though
I was on the Kepler late last year and I swear to god, the banter on the track was a billion times more light hearted 🤣
We did the Kepler Track on our honeymoon in 2005. Loved it. We actually used "Kepler" for our oldest son's middle name.
Did you like the stairs? I thought those were awesome.
Great video. Keep up the good work!
The video itself says it was released in Jan 24 but UA-cam says it was published on Jan 31. What’s that about?
That track is 60 kms long!! How do you have time to stop and speak??!! Got to admit that dude is fit.
Is there no sleeping stop in the middle somewhere?
Yes there is...there's two main cabin areas, plus a few spots you can setup a tent. I did it in two days one night which was tough, usually you do 2 or three nights. Or more if taking it easy.
@killjoyredux8361
What was tough about the 2-1 approach?
Was it just a lot of miles/hours, or something else that made it challenging?
And would you say the entire route is worth it, or would you recommend one part but not another?
Cheers! :)
Most of the housing units have been purchased with a mortgage. Speculators wanted to benefit from the leverage (put 25% down and the profits are 4x relative to paying cash). The banks are owed 75% of the purchase price.
As prices fall more than 25%, selling a property would mean recognizing that all of your downpayment has evaporated AND it means you have to find cash to pay the bank to pay of the loan that was not covered by the sale of the property.
There is no bankruptcy option in China to get out of a bad house deal. If your property is sold, you are stuck owning the remaining debt for life. It gets passed down to your kids. This drop in housing prices will damage the banks, but it wipes out generations of wealth for the speculators.
That sort of change it wealth for a large portion of the population leads to revolts.
When he checks his ego at the door; he is a very good teacher. Very informative video.
Maybe, but now I don’t trust him. Once you discover someone’s a TDS sufferer they’re just inherently unhinged on anything related to Trump. The connection isn’t necessarily apparent, so it’s difficult to recognize politicized areas. Hence unavoidably undependable analysis.
I’m mostly listening to this clip to confirm whether Peter’s retained any value for anything besides entertainment.
He’s never checked his ego at the door.
Where do I sign up for Peter walking tours and wine tastings?
Those that could get their money out of the country -- the elite and influential -- bought many properties in stable democracies like the US, Canada, Australia. The cost of housing from Vancouver to San Diego rose significantly due in part to this capital flight.
Leo made calculations from friends in PRC and concluded real population was in range of 800,000.
DiCaprio?
It’s like when u have reached the end of a Monopoly game and the players that are losing are attempting to sell off their under developed or mortgaged properties just to survive
Welcome to NZ, I live in Te Anau...not far from Kepler and the great walks. Enjoy!
How can a country/ government having so many cctvs and control over its networks not know how many people there are?
Because not everyone live in a giant city. China is enormous.
they dont want to know
Because their government is pretty inept and functions largely as a political beast meant to provide cushy positions, not actually get stuff done.
All corrupt thus data only used to bribe ! Lovely country for the CCP top members!!
Local governments lie to their federal government about the population to receive more money then corrupt local government officials pocket said money for themselves.
2034? OK, he said it. He did state a caveat. the data is soooo poor it's hard to know. But then he stated that 2034 is an outer boundary on the time scale. Time is the arbiter of truth. 9 years and counting.
Peter has been predicting that China has at most ten years left since 2014. He's not wrong about the structural problems, and he's probably not wrong about how it'll end, but I take his timeframe with a massive grain of salt.
He said it? So?
You take that and then look for more opinions.
This Is not about proving anyone wrong, so you can shine as some sort of "dick"?
Ten years is a very short time, and that time could be shorter (or longer).
Is the event not the date that matters, and that event mixes with other events and that produces yet another video LOL...
Keep waiting.. 9 years and waiting... so you can be better than some drunk hiker with a team of analyst, a go pro camera and a bottle of vodka in his backpack. . Good job!!!!!
Just look at Russia and more importantly North Korea as well for possible future of China. Dysfunctional states and govts seem to be able to last quite a long time. But it's never any good for the common person
As a historian myself, your view on China history will be my pseudo-history joke on tomorrow's seminar, thanks.
You need to snug up those load lifter straps a bit. I don't know how you can stand your bag jiggling and wiggling back there like that.
Thanks for another good video.
PZ likes to play it loose, especially with facts
excellent analysis and very detailed.
could only add that China recapitalised the banking system with AMCs and FX Earninga, but then never wrote down the debt..
and that when unwinds those it will shrink the money supply (as it printed money when it received those fx reserves)..
CCP: "day 3169.... real estate still hasn't collapsed lmao"
Peter’s videos are always interesting, and more than that, whether one feels enlightened, agrees with his assessments, or thinks he’s full of bananas, I must say that the comments section NEVER disappoints! 👍🏻
The trolls seem to misunderstand the fact that an opinion is just that. In this case, it is data backed and enlightening. The autocracies hate this free speech. I love the comments section too!
Meanwhile, in the West, and especially in English-speaking countries. There is a housing shortage stifling economic growth and feeding into political and social unrest.
In America we are correcting that one illegal at a time. Deportations going full speed.
But fortunately in the West we don't have 'tiered cities', so if you can't find employment in your current city or you feel housing costs are too high, you can move to another city with lower-cost housing and/or more employment opportunities without government restrictions. And as for the USA specifically, its not that hard to switch job fields (relative to China) so with a little bit of 'due diligence' and 'skills transfer' a person can find new employment. Free market economics, not centrally-planned like in China.
@ but the jobs and amenities that people want are clustered in the places that resist housing construction the most.
NIMBYism is a chronic, often deleterious, urban malady in the West.
Communism, even the military dictatorship type, is based on planned sufficiency, levelling UP, though corruption and incompetence frequently cause failure. Capitalism, although theoretically based on consumption, is actually based on INSUFFICIENCY and wage suppression; for example, the federal minimum wage has not increased since set in the 1990s. IF further proof were needed, the majority of Americans are now living from paycheck to paycheck and a slightly elevated inflation for a mere two years has caused family financial disasters, frustration and anger that has led to political chaos. In these circumstances, people vote for ANYONE who admits the problems and promises to fix them. No BILLIONAIRE is motivated to fix the system that makes them RICH.
Saying this for years!!!
Poor little Winnie the Pooh! 😂😂😂😂😂😂
He's not that little.
I'm looking at buying an apartment in Shaghai right now. I'm just waiting a bit longer for the price to keep going down.
tbh, when the ccp started talking about "stimulating domestic consumption", i knew it's over because of the unbelievable disconnect between their gov's view and reality
@@doomy330 tbh, it is like that in many Western countries as well, although at much smaller scale
@tk80mufa5Yep. Happens all over
@tk80mufa5 I see what u mean, but when it comes to geopolitics, it is very risky or dare i say wrong to compare countries because there are no 2 with totally shared history/context, so comparisons can make one sort of lie to themselves. that's imo of course
@@doomy330 agreed, maybe i should have mentioned examples like gov incentives/subsidies for EVs / green tech, when often the demand isn't there, etc.
Btw, of course i'm glad not to live in China
How is the expanding Chinese EV market going to affect the current crisis?
They should connect each apartment to the next one making the apartments twice as big and then gift them to the cupels that have more than 3 children.
The underlying debt won’t go away though.
*assuming any of them are structurally sound, yes.
You want to knock holes in walls when these places are crumbling away already?
@ Most are fine, media focuses on the worst.
@@kjell744 When you say "fine" you mean one look from an western safety inspector would make his hair turn white?
Don't pretend it's only some construction in China that is tofu quality, compared to proper building standards the Chinese might as well be using mud.
As for the media, Chinese media only shows the couple of OK looking places over and over to us in the west, they hide all the starving peasants living in squalor.
So... how does one create a short position against this situation? Asking for a friend.
You could look at Chinese real estate ETFs like $CHIR (Global X MSCI China Real Estate ETF) but it's already down -45% 1Y and -75% 5Y
@AK-cr5pe thanks for the pointout
The housing market is inflated and oversaturated with homes being on the market with astronomical price tags just stagnant for months. It is very clear that our generation will be likely one of the most devastating bubble pops in modern history. Seeking best possible ways to grow 250k into $1m+ and get a good house for retirement, I'm 54.
Safest approach i feel to go about it is to diversify investments. By spreading investments across different asset classes, like gold, silver, real estate, and international stocks, they can reduce the impact of a market meltdown. its important to seek the guidance of an expert
I’m closing in on retirement, and I have benefitted much from using a financial advisor. I didn’t really start early, so I knew the compound interest of index fund investing would not work for me. Funny how I pulled in over 80% profit than some of my peers who have been investing for many years. Maybe you should consider this too
I've been considering getting one, but haven't been proactive about it. Can you recommend your advisor? I could really use some assistance.
Finding financial advisors like Lisa Grace Myer who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I am on her website doing my due diligence. She seems proficient. I wrote her an email and scheduled a phone call. Thanks for sharing
Enjoy your content, thank you.
The best video yet! 😮😮😮
Classic Zeihan- love it.
his is all very interesting. Where are the sources to reference? How can we know if any of it is true... ??
You're going to have to look it up yourself if you want specifics. He does make a few admissions in the video that he looked at a variety of sources beyond official CCP data but they all varied from that data so some of what he says is somewhere between a 'best estimate' and a wild-a$$-guess.
Any opinion on the outlook for Tier one cities in China.... Beijing, Shanghai, Shenzhen?
Primate cities in polities that will be functionally independent. Some may become de jure capitals of recognized nations.
@18:38 - “Suppressing the people who would have collected the data” sounds a bit applicable to the situation in the US at the moment.
We need to go back and read the Monroe doctrine. It's been forgotten for two generations.
What happens when the "collapse" occurs?
you are seeing it in Russia right now
Trump's border wall will suddenly turn from being overrun by Central/South Americans to Chinese people. 😉 If Xi is still in power I could see an invasion of Taiwan just to instill nationalism and divert attention from the economic collapse.
? It's occurring right now, this is what happens... Things get worse, then more worse, then worse fast, then you hit the ground.
War
I used to watch all of Peter's videos. Now that they're a week old, I find myself just scrolling on past. Rarely do I watch any of his stuff anymore.
You can see this to a lesser degree in Viet Nam as well. I was looking at HUGE neighborhoods, (in theory, really, really nice houses) that were just shells. The other concrete was build, the facade was built, but there was no windows, carpet,furniture, etc. BUT there rows upon rows of these houses, just empty. Ghost suburbs.
6:45 Nailed it.
“Cheese"🧀 Deng atm
໒( ˵☉ ͟ʖ ☉˵ )ວ -╦╦(≖͞_≖
There is also the massive manufacturing and employment infrastructure that is involved in building all this real-estate and involved in manufacturing the raw materials and building supplies that are used to build these things. If no more housing is needed...there goes all the construction employment and all the employment in building materials.
Don't forget that a good chunk of these people started payments before the building was even finished, then the companies went under. So now you have a ton of people who owe on a loan for a product that doesn't even exist lol.
Excellent and Outstanding Insights!!!
The agricultural land that these buildings were built on is more valuable than the buildings.
And the country will never get that arable land back.
Shocking misuse of a fixed food security resource.
Thanks Peter.
looks like you're in the wilds on top of the world and then there is a flight of stairs LOL.
NZ
@@naomieyles210 I am aware.
What is the error bar on this estimate for China’s collapse. +- five years or so?
Changing times ahead Peter. AGI must change a few metrics. Great too see you back in NZ, the cheese yum. Your doing some serious miles there. It is a very beautiful place to be. Must come to Au, a couple of decent Treks in this neck of the woods. you may like. Cheers S 😎
I thinkthat was Peter's best explanation and summary yet. I am still stunned at the variety of hydrated land figures in New Zealand. But the land is sterile for animals. There are no predators. Bird life is sparce. Add to that the fact that New Zealand will not allow Americans to buy real estate there, or any ex-pat activity. But the whole country is similar to China in that they need 1000s of more dentists, and NOW!
11:41 Huh? 7%?
Or...
*70% !!!?* (Edit: Answer at 12:20).
The building sector in Australia has turned to utter corruption, houses are so poorly built now and are so expensive its an utter scam, so sad to see whats happening here
If real estate fails, this leaves gold as a viable safe-haven alternative for Asians.
Don’t forget the CCP has been on a gold buying spree for many years already. As well as the citizens slowly turning to gold and silver
Oh, china is already full of fake gold scandals