Chinese bank bombshell drops.... total lending in China for 09 amounts to 25% of 08 gdp

Wow so the Chinese really are interested in the western way of life. Being up to thier ears in debt and all.

This was a very amusing article but gloomy for the overall picture of the world economy. Basically the Chinese banks are lending out money in unprecedented amounts perhaps to boost their economy but it seems many of the money being lent is going towards car purchases and commodity speculation. Wow can you say dejavu or what.

www.cnbc.com...


I really don't know what to make of it but I am sure there are good money making opportunities at hand to make off of all the Chinese with cash on hand looking to either make big purchases or to speculate and try and get rich quick like Americans love doing.

reply to post by Desolate Cancer


Three key words are involved in China... state-owned banks... although I am in no way advocating state ownership, it seems to be working for them. Their banks, at least, are actually lending money to PEOPLE. Also, China actually makes things.. unlike the US... and instead of bailing corporations out, they are stimulating the people to buy things (their own China-made goods) through tax cuts and subsidies TO THE PEOPLE.

Today, the Chinese announced new car sales for June rose 48% and have risen 36% yoy. Also stimulating demand, the Chinese government cut some retail taxes and provided vehicle subsidies in rural areas to spur demand.

Automaker stocks rose today on the announcement.

There are a number of differences between China and the US. Seems they're handling it better.

reply to post by Iamonlyhuman


Well that is fine for now. I mean the Chinese have lots of reserves, and a car could be said to help them get products ot market easier and get ot work easier so it could have beneficial impact on economy and help the borrower repay faster.

But what this will do is increase the demand for oil and increase pollution can you imagine what the impact from 250mill Chinese would be?

But at the same time what this shows is an artificial boom for the Chinese, since its all on borrowed money.

Seems as though China is going to be the source of the next major crash when we get through this one. They have started the process and watching the economic growth will be too addictive for them to stop.

They might fair better than the rest of the world this go around, but there time will come. It always happens greed will get a hold of the political class and it will all go to hell.

I am not actually sure if the "borrowed" money really went to the PEOPLE like Iamonlyhuman claims, worst case scenario it has gone to the pockets of corrupted business men and officials.

but since China seems to be less affected and we do not feel the financial crisis that much, maybe the money did go into the real economy and the money is merely recycled around, that would be a good thing, but using borrowed money can not last in the long turn.

as for the environment, c'mon, why First world environmentalists love to pull that pollution argument up for when they see a country emerging out of poverty? and at the same time very often, feel it is so sad for those poor guys in the Thurd World.... either hunger or less green, i think almost everyone in emerging/undeveloped countries would choose the latter, the best we can do is finding a better balance than what happened in the Developed countries.

[edit on 9-7-2009 by yiersan]

Originally posted by Desolate Cancer
reply to post by Iamonlyhuman

 

Well that is fine for now. I mean the Chinese have lots of reserves, and a car could be said to help them get products ot market easier and get ot work easier so it could have beneficial impact on economy and help the borrower repay faster.

But what this will do is increase the demand for oil and increase pollution can you imagine what the impact from 250mill Chinese would be?

But at the same time what this shows is an artificial boom for the Chinese, since its all on borrowed money.

Um welcome to the 21st century - what you are referring to is a stimulus package - der - the Chinese do not borrow money like the US - they have their own - der - the commodities speculation is actually stockpiling and is a way of moving away from US treasuries, ensuring a plentiful and cheap supply when demand resumes -

Population of China is 1.1 billion - they will average about 40million new middle class consumers every year till 2020 - thats about 8 new york cities every year for 10 years -

This has been an issue for about 20 years now for anyone who has paid attention.

The prospect of China, the supposed new world power, imploding - has been avoided by everyone. The media, economists, online typists, conspiracy site types, talk China up as a counterpoint to America dominance.

Truth is China's rise in the past couple decades have been a fragile house of cards. The country is almost unmanageable given it's size and huge population. Hundreds of millions in the impoverished South and West only begrudgingly allow Beijing governance. Their regional economies are subsidixed to the tume of billions with roads, food supplies, fuel, manufactured goods, just to keep them compliant. Right no Uighurs are rebelling in the Western part of the country.

The money is all concentrated on the Easter portion, the coast, Beijing, Hong Kong, Shanghai,

The large scale exporting of the manufacturing of American consumer goods to China enormously expanded the economy. But infrastructure and military spending went up as well. Huge loans based on projected growth will never be repaid.

Chinese banking is in shambles. The impoverished fed the dream of huge growth are returning to their agrarian homes. Orders are down 40%, factories are closings by the tens of thousands, loans are being recalled. Investment is fleeing the country.

Hard to believe, but the engine may have stalled, and permanently,


Mike

reply to post by audas


I agree. And, you could even go so far as to speculate that the Chinese run-up in debt is a way for them to exit the U.S. dollar because when the time comes they can always say that they need to pay their debts with the money they have currently invested in dollars.

Edit to add: The total Chinese debt in the article amounts to around 10% of the amount the Chinese had invested in the U.S. in March, 2009.

[edit on 10/7/2009 by Iamonlyhuman]

Actually i believe that the Chinese are funding preperations for war by getting locals to buy raw materials on order from the government. Its a "stimulus" that is just buying raw materials by many Chinese companies and then piling them up. You can see from other articles that they are buying all sorts of stuff and then you can see the Chinese complaining that they can't make any money because there is so much stuff. However they claim to be saving the chinese companies from competition by buying all the companies in a DOWNTURN in exports.

Allyn

I'm not surprised this has been brewing for a few months.
I've kept track.


China falls into budget deficit as spending balloons

02 Feb 2009
China falls into budget deficit as spending balloons

Despite a near 20pc rise in tax revenues and a record surplus of 1.19 trillion yuan (£128bn) in the first six months of the year, the dramatic scale of government spending in November and December was enough to plunge the entire year into deficit.

The figures are the first indication of how quickly and forcefully China reacted to the economic crisis after it announced a fiscal stimulus package of 4 trillion yuan in November to build new roads, railways, schools and hospitals.

China may need more deficit spending-gvt researcher

BEIJING, March 5 (Reuters) - China may have to increase its budget deficit beyond the figure of 950 billion yuan announced in Thursday's budget if growth does not pick up by mid-year, a Ministry of Finance researcher said.

"China may have to widen the fiscal deficit further if the economic situation continues to be weak in the second quarter," the researcher, Jia Kang, told reporters on the sidelines of the annual session of the National People's Congress, the largely ceremonial parliament.

reply to post by Desolate Cancer

Well we went past 100% of GDP so we still are better at sucking
at the hind tit of the banksters for a never ending debt slave cycle.

reply to post by Desolate Cancer

But at the same time what this shows is an artificial boom for the Chinese, since its all on borrowed money.

This is becoming a scary belief in the US and, sadly, this incorrect thinking is by no accident. Our handlers want you to think that borrowing money is the worst thing regular Americans could practice when, in the system they themselves have built, survival depends on credit alone! It's not artificial, it's mandatory to survival!

The one thing indistinguishable among all businesses is their need for credit. No matter how big, or how small. Success is futile without the ability to borrow money! For those that don't already know, the driving force behind our economic decline is lack of, or loss of available credit!! In this system, survival depends very little on anything else.

Healthy companies are being systematically destroyed in this country by banks shutting them off from credit. Despite what they want you to believe, this is the truth. This is not an accident, but an ingenious plan to destroy our economy without fail. There is no other way to take down a thriving small business? So they designed a system that makes them reliant on bank credit, then simply take it away. You are a fool to think anything other than this obvious truth.

Hell, they just sold you on giving up $billions to stimulate this single necessity for this very reason? Now they tell you that credit is bad, and you believe that too? You cannot believe both, not even when they tell you to. Stop being their idiot and start thinking things logically.


Peace.

slayer69

I didn't see those articles you sourced, they are very supportive to what I've been saying here for a long time. The ONLY thing I've been touting is to watch that the Chinese, Russians, and others are coming for us. Our government will not tell us, and would rather let us die than warn us. Warn anyone who will listen. Buy a lot of beans and rice you'll be needing it soon. May God have mercy on your soul Slayer69.

carolina1737