China GDP (PPP) close to 87% of US GDP, India Displaces Japan for third Place

[Guest Worlds Within the Margin]

World Bank GDP (PPP) report for 2011 is finally out. Compared to 2005 there have been big shakeups, China's economy has grown massively and India has displaced Japan for the third spot.

 

 

http://www.cnbc.com/id/101626562

[PatientCheetah]

World Bank GDP (PPP) report for 2011 is finally out. Compared to 2005 there have been big shakeups, China's economy has grown massively and India has displaced Japan for the third spot.

 

 

http://www.cnbc.com/id/101626562

 

When China does reach parity of U.S., each Chinese citizens are still 5-6 poorer because China's population is 5-6x larger. Same issue with Japan - India's population is growing while Japan's is shrinking.

[stahleyp]

Well, if true, I can only imagine the consequences if they do go through a real estate meltdown (as many smart people are suggesting).

[PatientCheetah]

Well, if true, I can only imagine the consequences if they do go through a real estate meltdown (as many smart people are suggesting).

 

if china does have a real estate meltdown or something smaller, the ones that are getting hurt are the real estate developers with too much inventory and the commercial banks that provide real estate loans. individual mortgage lending standards are much stricter - 20% down payment (the average down payment is in the 40%+) and no mortgage for second homes so mass foreclosures are unlikely. in the end of the day, China is not democratic, the state guarantee to the state banks are explicit, it does not need public consent to recap its banks, it has done it before (recapped the state banks in the mid 90s due to a massive amount of non-performing loans from the state owned enterprises), it will do it again because it has the capacity to

[stahleyp]

Well, if true, I can only imagine the consequences if they do go through a real estate meltdown (as many smart people are suggesting).

 

if china does have a real estate meltdown or something smaller, the ones that are getting hurt are the real estate developers with too much inventory and the commercial banks that provide real estate loans. individual mortgage lending standards are much stricter - 20% down payment (the average down payment is in the 40%+) and no mortgage for second homes so mass foreclosures are unlikely. in the end of the day, China is not democratic, the state guarantee to the state banks are explicit, it does not need public consent to recap its banks, it has done it before (recapped the state banks in the mid 90s due to a massive amount of non-performing loans from the state owned enterprises), it will do it again because it has the capacity to

 

You might be right, Patient. Many times, though, there are unforeseen circumstances that seem to pop up after a situation has been "contained."

[gary17]

The only two things china has that we didn't - a government made of seven people that can make fast decisions and ability to print its own currency. But agreed a lot of unforeseen issues.

 

My friend recently got back from a golf trip in china says there's hundreds of ghost towns each with like a dozen forty high rises nobody lives in. At night you would see one may be two lights on in the entire subdivision. But most of the developments are funded by local governments because the construction has been a lucrative way to transfer money into their own pockets. Hence the central government is cracking down on corruption.  So similar to Ireland and US or any other housing bubbles, except this appears to be built using state money most of the time. 

[yadayada]

has there ever been a case when everyone talks about a bubble before it bursts, and it turns out to be an actual bubble? Everyone and their mother is talking about how China will crash.

 

How will this affect real estate prices in cities in the west? I think in Vancouver you saw small crappy houses suddenly being worth like 4-5x as much because of the chinese buying those things up everywhere. Maybe we can enjoy lower RE prices if that thing will crash?

[jouni1]

not everyone and their mother. people are crazy about alibaba. it's catching on other chinese internet stocks.

 

a chinese video streaming website is a good investment because youtube makes a few billion after years of google supporting it.

 

third point is investing in japanese banks etc.

 

none of this seems like people are super cautious about china/asia. maybe they got bored of waiting for the crash? there's money to be made etc