
China's central bank governor publicly warns of rising risks to financial system - cepth
https://www.bloomberg.com/news/articles/2017-11-04/china-s-zhou-warns-on-mounting-financial-risk-in-rare-commentary
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icu
Ironically China's Central Bank is to blame for the enormous, and questionably
productive, private debt... the true extent of which is opaque.

For more info the Aug 2017 IMF report is worth a read:
[http://www.imf.org/en/Publications/CR/Issues/2017/08/15/Peop...](http://www.imf.org/en/Publications/CR/Issues/2017/08/15/People-
s-Republic-of-China-2017-Article-IV-Consultation-Press-Release-Staff-Report-
and-45170)

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danmaz74
On the other hand, if China had tried to reign in its bubbles during the
crisis from 2008, that would have been bad for then and the whole world
economy.

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seanmcdirmid
Perhaps, but it would have been better for china itself in the long term. The
worldwide crash would have also provided political cover for its leaders,
while if it crashes now, they are pretty much on their own in taking blame. I
don’t envy the spot they put themselves in, can kicking can only last so long.

~~~
danmaz74
Of course, you can never know the "ifs" of history, but crashing your internal
demand at the same exact time when your external demand is collapsing looks to
me like a perfect recipe for depression.

~~~
seanmcdirmid
I was there at the time. It would have just been a minor correction, they
could have pushed through more reforms at the same time. Instead they decided
to to go full turkey on bubble expansions.

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shaunlgs
I expect people to predict this will cause the downfall of China.

People had been attributing causes to the downfall of China.

"He is best known for his book The Coming Collapse of China (2001), in which
he argued that the hidden nonperforming loans of the "Big Four" Chinese State
banks would likely bring down China's financial system and its communist
government and China would collapse in 2006, 2011, 2012, 2016, & 2017\.
Critics say that Chang has destroyed his own credibility by making wrong
predictions repeatedly."[0]

Here, Gordon Chang predicted that demographics will be the downfall of
China.[1]

Does anyone want to add other causes to the downfall of China?

Being an author trying to make some money off people's wishful thinking is not
a bad idea though.

[0]:
[https://en.wikipedia.org/wiki/Gordon_G._Chang](https://en.wikipedia.org/wiki/Gordon_G._Chang)

[1]: [http://nationalinterest.org/feature/chinas-self-inflicted-
de...](http://nationalinterest.org/feature/chinas-self-inflicted-demographic-
disaster-here-14216)

~~~
zht
It's actually really frustrating every time I see Gordon Chang on CNN or some
other news channel as an "expert" on China. He makes these Harold Camping like
predictions about how China will fail by a specific year, none of which have
obviously come true.

I actually wonder if people who don't know his history of poor predictions
that well see his last name "Chang" and assume that he has some inside
knowledge or knows more about China than the actual pundit.

~~~
eru
CNN wants to catch your attention long enough to look at the next
advertisement. They don't care about whether Gordon Chang's predictions turn
out true or not.

Predictions of doom and gloom are more exciting than 'most likely systems will
muddle through and status quo stays king'.

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baybal2
Whatever is written there, was said for the last 15 years.

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seanmcdirmid
Yes, just like people warning about the housing bubble before 2008, that was
never going to happen. In the 80s people kept talking about a Japanese asset
bubble. Chicken little.

Also, this is coming from china central bank leader himself. Might as well be
something Xi is saying.

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danmaz74
Honestly, this looks like a very serious (non-political) analysis and the
recommendations look very good: use regulation where necessary (eg against
bubbles and fraud), use markets where they can work best (eg to foster
competitiveness). Being able to follow up on these is where the difficulties
come.

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NicoJuicy
This is what I said 2 weeks ago, about China:

People who travel there report empty buildings ( cause : loans not paid back
and the mortgage are the buildings )+ multiple articles about bank failure (
eg. Google China shadow banking) I always thought China's motto was: Fake it,
untill you make it ( their annual growth of 8% is based on a big part on empty
buildings and not repaying loans. It is controlled by the governement and they
try to eliminate the crisis by expanding influence in the world. Eg. Too big
to fail) \---------- In short, the growth of China is artifically inflated to
8% per year, since many years --> huge internal debt. Now they are doing the
same on a global scale. We are all doomed :)

================ Can anyone elaborate where I was wrong or what the report
says about this? Going to read it now..

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eru
About the 'ghost cities': start at
[http://www.themoneyillusion.com/?p=23817](http://www.themoneyillusion.com/?p=23817)
and follow the links. They are seldom ghost cities for long.

~~~
seanmcdirmid
Kangbashi is still a ghost city, they’ve just zoned out a bunch of empty
apartment buildings and moved the goalpost from millions of people to a few
hundred thousand. Anyways, most 3rd tier and up cities in china have zones
with lots of empty apartments, they are all sold out to speculators, but even
the government can’t think of anything to do with them.

I find it really crazy whenever I visit my wife’s hometown in south Hunan (a
small city with a couple million people and lots of dead real estate
developments).

