Torygraph says that China is facing a subprime crisis

The Daily Telegraph has written an article which is suggesting that the Chinese housing market is about to crash and burn harder than the US subprime crash in 2008. The value of the toxic debt is reported to be £1 trillion and the CCP is in no position to do a bailout.

edited 7th Oct '11 5:29:46 AM by whaleofyournightmare

This would probably be the worst possible time for the Chinese economy to collapse. It would totally wipe away any recovery the US economy had made and worsen the already dreadul crisis in Europe.

First of all, what effect is this likely to have on China?

Well, I don't know tbh.

Well the People's Party has based their legitimacy off of their ability to keep the economy strong. If that disappears, its Tianamen Square all over again.

They could only cook the books for so long before the economy made them face the truth...

The other day I heard on NPR that China was actually trying to slow down the housing portion of it's economy. It would seem that the effort to do so has come too late.

I am really hoping that Cheng Siwei is wrong in his assessment. The Chinese housing market is not so much a bubble as a blimp and I really do not want to be around for the Hindenburg explosion.

On the same day that Congress tries to pass a bill regulating China's monetary policies too. This is bad.

edited 7th Oct '11 5:57:03 AM by Pentadragon

How can the US Government do that (if it is them)? Surely China is a different Sovereign State?

If that's true, it's great news: The current system is on the verge of a well-deserved collapse...

The only thing that might save current society from corporatism and authoritarianism is revolution, and it requires a full-blown, beyond-repair collapse before people will get off their lazy fat butts and dismantle the system.

edited 7th Oct '11 6:40:15 AM by SavageHeathen

...and rebuild the same system again?

You're fighting Human Nature, Savage*

edited 7th Oct '11 8:08:24 AM by Greenmantle

Well that's practically expected given the thread on China's ghost cities was already on a while back...

Even if a similar system is built afterwards, some settling'o'scores is still in order.

A collapse and revolution at least hold some hope for crushing corporatism and puritanism, which have only gotten stronger and stronger in the last years.

I, for one, will be eagerly waiting for the Chinese economy to implode.

edited 7th Oct '11 12:39:25 PM by SavageHeathen

OK. What do we in the rest of the world do? Prop China up by buying all that U.S. debt they own off of them?

If EVERYONE did that...everybody'd have a little bit of leverage over the U.S. economy, instead of one superpower owning the dollar.

I'm not very well-informed on how economics works. What would this do to the rest of the world?

Trade may collapse further deepening the recession. Almost everybody sells crap tons to China.

It would seem, according to what the article wrote about the credit bubble in China, that a major corruption sweep would clear up the problem. Of course, corruption sweeps are notoriously difficult to run in any country.

I agree with...Savage, but probably not for the same reasons...I am a Libertarian, in the sense of "Gun-Rights-Pot-Rights-Hardcore-Capitalism" Libertarian , and as much as I love the free markets and the evil corporations, I'm not blind enough to not see that China goverment needs to collapse.

edited 7th Oct '11 10:35:48 AM by Anthony_H

I wouldn't miss the Chinese government.

But I don't want to see a Chinese civil war if the government goes.

That would be aaaaaalllllll kinds of unpleasant.

@Radical: Thank the Gods, someone in this thread is sane and doesn't want 1.3 billion people plunged into bloody chaos...

Well, the good news is that Chinese workers are already treated so cartoonishly inhumanely that an economic collapse doesn't strike me as that many more steps down. Here's hoping they fix things in the process.

Well not exactly good news but you get the idea.

edited 7th Oct '11 12:31:31 PM by Pykrete

That, too. It's hard to imagine Chinese workers being any worse off during a collapse, considering that they're basically slave labor anyway.

Also, considering that the global burgeoisie is trying to reduce the global proletariat to the poverty and powerlessness of the pre-socialdemocracy days, it's hard to imagine people at large (in the mid to long term) being any worse off if there is a collapse than if there isn't.

edited 7th Oct '11 12:39:03 PM by SavageHeathen

Lovely.

^ There is also the issue that most of Africa is dependent on China for stability, both economically and politically.

Australia, Brazil, Argentina, Taiwan, New Zealand, South Korea and Japan all have significant ties to the Chinese economy and it would be very painful if China suddenly went belly up.

I hope you like greater unemployment and a lower quality of life.

edited 7th Oct '11 1:53:39 PM by Pentadragon

If that happened, it would also bring down the other countries they have ties with — including both the USA, Britain and the rest of the EU — if one falls (the USA, the Eurozone, or China), expect it to have very painful effects on everyone else (and possibly cause collapse there).

Everything is Interconnected these days. If one goes, they all go.

Yep. This is actually (IMO) a question of priorities.

Depending on your perspective, this could either be a great thing (a bigger step forward for democracy than the Arab Spring, which wasn't as successful as I for one hoped) or a disaster (recession would be a misnomer, we really should start calling it the Second Great Depression). It all depends on whether you think human rights for a large percentage for the world or quality of life for all of it is more important. I'm really not sure which I prefer.

This is assuming, of course, that the fall of the CCP would be bloodless. Which is actually pretty unlikely, now that I think about it.