Is China heading for a ..... recession?

[Deleted]

China is pretty much in the position the US was in the early 20th century, as it's the "engine" of the world economy. When financial crisis hit the US in the 20s it was felt all over the world, much like the one a few years back. If a financial crisis would hit China within the next few years, before the US and Europe have had time to recover from the last one... It could get very ugly indeed.

[Deleted]

How the hell does a country that gets money from all over the world and several very large countries are in debt to it, actually go into recession ?!

[Grummgug]

much of their economy relies heavily on the value-pegging of the Yuan(why the international community tolerates this is beyond me)

two words: the Cold War

for about 50 years, Americans lived under the threat of mutual assured destruction as the USA and USSR played brinkmanship. China was the wild card. They had the potential to shift the balance of power one way or the other. To ensure China didn't forge an alliance with the USSR, we decided to show them favors. We offered them technology, let their scientists tour our factories, guided them in growing their economy, and even allowed them to enjoy a beneficial pegging of the Yuan.

The goal was to prevent Cold War II.

If that meant China enjoyed a lot of economic advantages, it was considered worth it. Today, the economies of China and US are so intertwined that we've likely successfully averted Cold War II. They couldn't truly become aggressors against us now without causing great damage to their own economy.

Of course in solving the Cold War problem, we have new issues to deal with. Such as having to worry about how economic mistakes made by China impact the rest of us.

[logintime]

How the hell does a country that gets money from all over the world and several very large countries are in debt to it, actually go into recession ?!

See, Japan: 1990s.

It happens. Holding debt and having huge foreign investment is no guarantee of financial stability.

[Mihalik]

China has been on a fast track to a major crash for years now.



Pouring money into constructions for decades to inflate the GDP. Essentially playing a pyramid scheme.



Mass producing millionaires and billionaires out of pyramid game funding schemes. The wreck will be monumental when all this loses value and everyone in China will start shipping whatever money they can abroad. The Chinese governament will ofcourse short sell on all the foreign American and European debt they hold to finance themselves (which will only work on the very short term) turning the Dollar and after that the Euro into toilet paper. It will be a mess on a monumental scale.

[Hooked]

China has alot of poor people, one day they will demand more money and the cheap labor that china has relied on to build their economy will disapear. I wouldnt compare china to japan, japan made alot of money off innovative technology. Japan actually invented new consumer goods that were very popular worldwide like video game consoles, walkmans and other personal electronics. China seems to just take someone elses idea and build it cheaper, they have nothing to offer besides cheap labor and low quality materials.

[Ult92]

See, Japan: 1990s.

It happens. Holding debt and having huge foreign investment is no guarantee of financial stability.

Don't conflate Japan's debt with it's economic stagnation. The debt was largely NOT the cause of the stagnation but rather an effect of it. Also, Japan's situation is not quite as dire as people make it sound. They are still doing relatively well. What they had was stagnant growth and some deflation, rather than deep recession. The size of their working population is shrinking as well, so it's difficult for them to get any growth at all. Lately they have been trying hard to turn this around with some very loose monetary policy and, yes, more fiscal stimulus despite debt at 250% GDP. They had 4.5% growth annualized last quarter.

[Kraenen]

It's really strange to think that a country so overpopulated would have ghost cities

[Sunseeker]

How the hell does a country that gets money from all over the world and several very large countries are in debt to it, actually go into recession ?!

Because most of it's economy is based on smoke and mirrors and cheap labor. And China is finding out the same way everyone else has: someone else can always do it for less. You take away the cheap labor factor of the Chinese economy, and all they're got is a quaint magic show.

[Robo]

A recession is negative growth not reduced growth...

[TrumpIsPresident]

They're not worried because they know the USA will collapse first and they can benefit from the following global re-structuring.

[Tierbook]

They're not worried because they know the USA will collapse first and they can benefit from the following global re-structuring.

if the US crashes we are taking the rest of the world down with us

[Eliandal]

Because most of it's economy is based on smoke and mirrors and cheap labor. And China is finding out the same way everyone else has: someone else can always do it for less. You take away the cheap labor factor of the Chinese economy, and all they're got is a quaint magic show.

A quaint magic show with 3 TRILLION in straight currency reserves. If you add Hong Kong and Macau to that you have another half trillion. They are not in as dire straights as some would paint them - especially considering that their foreign debt is estimated to be much less than a trillion dollars. They will weather any storm FAR better than the 'west' did

[Kalyyn]

A quaint magic show with 3 TRILLION in straight currency reserves. If you add Hong Kong and Macau to that you have another half trillion. They are not in as dire straights as some would paint them - especially considering that their foreign debt is estimated to be much less than a trillion dollars. They will weather any storm FAR better than the 'west' did

3 trillion is a good emergency fund, but not something you can live off of if your income dries up.

[TrumpIsPresident]

if the US crashes we are taking the rest of the world down with us

No, haha its not. Not anymore. The loss of the USA's commercial goods consumption will be balanced by the drop in price of oil created by a surplus previously consumed by the USA.

In other words if I lose $10 a month because my customer (USA) isn't ordering anymore I'll make it up elsewhere because my supplier (UAE) now has a surplus of his product he will now sell at a lower rate because his customer (USA) is also not ordering. The global community has had enough time to understand how to live without the USA. It already knows the end result what happens when radical socialism takes over, there's been enough examples of that throughout history. Believe me, they're ready.

Besides the destruction of the USA will bring about untold riches in new business ventures after the dust settles.

The only thing that will be missed about the United States is its blockbuster movie output. Something tells me the world will get over it.

[Aeluron Lightsong]

No, haha its not. Not anymore. The loss of the USA's commercial goods consumption will be balanced by the drop in price of oil created by a surplus previously consumed by the USA.

In other words if I lose $10 a month because my customer (USA) isn't ordering anymore I'll make it up elsewhere because my supplier (UAE) now has a surplus of his product he will now sell at a lower rate because his customer (USA) is also not ordering. The global community has had enough time to understand how to live without the USA. It already knows the end result what happens when radical socialism takes over, there's been enough examples of that throughout history. Believe me, they're ready.

Besides the destruction of the USA will bring about untold riches in new business ventures after the dust settles.

The only thing that will be missed about the United States is its blockbuster movie output. Something tells me the world will get over it.

Gee how apathetic you are about us. Did some American insult you or hurt your feelings to act this?

[TrumpIsPresident]

Gee how apathetic you are about us. Did some American insult you or hurt your feelings to act this?

I live in the USA. Its great. I will miss it.

[Aeluron Lightsong]

I live in the USA. Its great. I will miss it.

Right. Believe what you will.

[Kalyyn]

The only thing that will be missed about the United States is its blockbuster movie output. Something tells me the world will get over it.

That and our airplanes, our weapons, our computers...

We're still the worlds 2nd largest manufacturer (we were #1 until 2011). Its just that rather than producing cheap, useless shit like China, we produce the things that make the modern world, well... modern.

[TrumpIsPresident]

That and our airplanes, our weapons, our computers...

We're still the worlds 2nd largest manufacturer (we were #1 until 2011). Its just that rather than producing cheap, useless shit like China, we produce the things that make the modern world, well... modern.

None of which can only be made in the USA. All of which will move overnight somewhere else and not miss a beat.