'中国的信贷泡沫终于破裂了'

choi

英媒：中国信贷警报灯闪现. BBC Chinese, Dec 15, 2011.
http://www.bbc.co.uk/zhongwen/si ... hina_property.shtml

, which is based on

Ambrose Evans-Pritchard, China's Epic Hangover Begins: China's credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC's dream that is at last coming down to earth with a thud. Daily Telegraph, Dec 14, 2011.
http://www.telegraph.co.uk/finan ... angover-begins.html

Quote:

"It is hard to obtain good data in China, but something is wrong when the country's Homelink property website can report that new home prices in Beijing fell 35pc in November from the month before.

"The question is whether the People's Bank can do any better than the US Federal Reserve or Bank of Japan at deflating a credit bubble.

"Chinese stocks are flashing warning signs. The Shanghai index has fallen 30pc since May. It is off 60pc from its peak in 2008, almost as much in real terms as Wall Street from 1929 to 1933.

"China's $3.2 trillion foreign reserves have been falling for three months despite the trade surplus. Hot money is flowing out of the country. 'One-way capital inflow or one-way bets on a yuan rise have become history. Our foreign reserves are basically falling every day,' said Li Yang, a former central bank rate-setter.

"The economy is badly out of kilter. Consumption has fallen from 48pc to 36pc of GDP since the late 1990s. Investment has risen to 50pc of GDP. This is off the charts, even by the standards of Japan, Korea or Tawian during their catch-up spurts. Nothing like it has been seen before in modern times.

"Professor Patrick Chovanec from Beijing's Tsinghua School of Economics said China's property downturn began in earnest in August when construction firms reported that unsold inventories had reached $50bn. It has now turned into 'a spiral of downward expectations.'

"The International Monetary Fund's Zhu Min says loans have doubled to almost 200pc of GDP over the last five years, including off-books lending. This is roughly twice the intensity of credit growth in the five years preceeding Japan's Nikkei bubble in the late 1980s or the US housing bubble from 2002 to 2007. Each of these booms saw loan growth of near 50 percentage points of GDP.

Note:
(a) 链家在线, 最专业的二手房网站、租房网站
www.homelink.com.cn
(b) The analysis says, "'Investors are massively underestimating the risk of a hard-landing in China, and indeed other BRICS (Brazil, Russia, India, China)... a "Bloody Ridiculous Investment Concept" in my view,' said Albert Edwards at Societe Generale.

Mr Edwards' work is presumably copyrighted and available upon payment. But we can learn of it from a secondary source:

Sudip Roy, BRICs up Against a Wall. Reuters, Dec 15, 2011.
http://af.reuters.com/article/co ... AFL6E7NF32120111215
(c) The Telegraph analysis next quotes Mr Edwards as saying, "It no surpise that China has just imposed tariffs on imports of GM cars." An "is" is missing.
(d) The analysis states, "The reserves cannot be tapped to prop up China's internal banking system. To do so would mean repatriating the money – now in US Treasuries and European bonds – pushing up the yuan at the worst moment."

For China to pull reserve out will reduce demand for dollar and euro and simultaneously create demand for renminbi, appreciating yuan relative to dollar and euro. This is just the common sense.
(e) The analysis maintains appartments in China "have themselves become a momentum trade."
(i) How to Momentum Trade Stocks. eHow, undated.
http://www.ehow.com/how_4621642_momentum-trade-stocks.html
("Momentum trading of stocks is for the intermediate or advanced trader. Momentum trading of stocks is a spur of the moment trading strategy"
(ii) momentum trader
http://en.wikipedia.org/wiki/Momentum_trader
(A day trader who makes trading decisions based on the market being perceived by the trader as being higher or lower than expected)
(f) ZHU Min  朱 民
(g) Separately, Jing ULRICH 李 晶
http://en.wikipedia.org/wiki/Jing_Ulrich
(From 2003 to 2005, Ulrich was managing director of Greater China equities at Deutsche Bank; is the managing director and chairman of global markets, China at JPMorgan since 2005; is married to Paul Ulrich)

remains bullish on China's economy. "No hard landing," she affirms.