Evergrande situation

[PercT4b]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

[avikz]

I would request you to watch this video to understand the gravity of the situation,

https://youtu.be/6wdXUsfgq58

But as far as bitcoin is concerned, I don't think there will be any negative impact at all. Rather, bitcoin may see new highs because of such huge debt Evergrande is going to default. But some small banks in China will definitely face capital crunch unless the Chinese government bails them out.

[Hydrogen]

Some may find this piece informative.

Goldman Flags $8.2 Trillion Threat Worse Than China Evergrande

Sep 30, 2021

The real worry concerning the China Evergrande default drama is the inevitable where-there’s-smoke-there’s-fire paranoia that accompanies debt stumbles.

The most worrisome such blaze, say analysts at Goldman Sachs, is surging local government debt levels that President Xi Jinping’s men have done their best to hide. The default troubles at the globe’s most indebted property development seem like small embers compared to the $8.2 trillion worth of local government financing vehicles outstanding.

And that’s just the LGFVs we know of. The data that Goldman’s Maggie Wei highlights is as of the end of 2020. Clearly, the tally is higher now—perhaps markedly. Ten months ago, these shadowy investment schemes had reached 53 trillion yuan, up from 16 trillion yuan, or $2.47 trillion, in 2013. They now amount to roughly 52% of China’s gross domestic product, topping the official amount of outstanding government debt.

In other words, as scary at the $300 billion Evergrande story might be, Xi’s government has much bigger problems on its hands. The most acute: keeping GDP this year from falling too far below the 6% Beijing hoped to produce without adding to the nation’s bubble troubles.

The forces behind local governments sitting on financing-vehicle debt worth twice the size of Germany’s GDP date back to 2008. Even before the Lehman Brothers crisis, Communist Party dynamics encouraged municipal borrowing binges. The way local officials got attention in Beijing—and rose to national prominence—was producing above-average GDP rates.

https://www.forbes.com/sites/williampesek/2021/09/30/goldman-flags-82-trillion-threat-worse-than-china-evergrande/

It appears china has an outstanding $8.2 trillion LGFV (local government financing vehicles outstanding) bubble to rival the united states student loan or housing bubbles.

China's economy is still rolling along despite chinese banks defaulting and needing to be bailed out. Coupled with many catastrophic articles published about large chinese enterprises failing across the board.

The united states war in the middle east is claimed to have costed more than $12 trillion by some sources. If china pursues war against hong kong, taiwan and neighboring territories. What would the cost be? Military technology in a modern age is so overwhelmingly expensive, it could carry the potential to make war too expensive an option to pursue, without eventually bankrupting warring nations.

With the individual cost of sophisticated missiles rivaling the cost of a lamborghini. At a certain point, launching lambos at foreign countries would have to become economically unfeasible, is it fair to say.

[Darker45]

This has already been discussed weeks ago in this exact same section of the forum. Here is the thread created by
paxmao: Chinese construction Mega-Bankruptcy. Evergrande about to crash for 355B. You might want to read some of the most insightful responses there.

Anyway, this Evergrande situation is more like a serious symptom of an even more serious economic illness in China. The country has been secretive and seems to be running smoothly from the outside. That's the image the country could easily project because the ruling party has really no credible opposition. But they can only control the damage for some time. Sooner or later, signs will really come out.

[NeuroticFish]

outstanding $8.2 trillion LGFV (local government financing vehicles outstanding) bubble to rival the united states student loan or housing bubbles.

Global economy looks most of the times like a castle built of playing cards and waiting for just a little gust to make it crumble. It doesn't necessarily means that'll happen now, but the risk is always there.

Anyway, this Evergrande situation is more like a serious symptom of an even more serious economic illness in China.

That's correct. I just hope that "western" banks were not too greedy and aren't that much tied to Chinese economy, because if they are, we have a perfect storm.

If china pursues war against hong kong, taiwan and neighboring territories. What would the cost be?

Somehow the wars' seem to postpone an economic crisis. Yes, they'll be accounted for, but at a later time. And this is something many unfortunately may prefer.

That's the image the country could easily project because the ruling party has really no credible opposition. But they can only control the damage for some time. Sooner or later, signs will really come out.

The more informed somebody is, the more he knows that China's reality is not the one from the image they try so hard to publish.
That's why I do expect the banks didn't go for China head first; although they tend to do extremely foolish moves just because they're too greedy.

[Betwrong]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times



should shut the f*ck up, and the Chinese government should deal with the situation.

[paxmao]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.

..

You got it all wrong. A ban in China means nothing since it has been clamping bitcoin trading and even some mining operations and the market already knows that. Regarding Evergrande, bitcoin can only go up as it is a protection against crisis, particularly those created by massive defaults. Bitcoin has simply responded to the crypto exchanges clampdown in South Korea, which is actually a relevant actor.

The Evergrande crisis is perfect and is something the market should actually appreciate positively for crypto.

Some may find this piece informative.

...

It appears china has an outstanding $8.2 trillion LGFV (local government financing vehicles outstanding) bubble to rival the united states student loan or housing bubbles.
...

My interpretation of this data is quite different. Firstly, the fact that there is debt does not mean there is a bubble. A bubble is created when stuff is bought for the only reason of selling it more expensive to someone else. You may argue that there might be a credit risk, but these loans against vehicles are quite different from loans against houses particularly coming from the gov. which would endure even massive defaults or print a bit of cash.

[so98nn]

The resistance to the China ban was a success. Or may be bitcoin never cared about it or may be this was big plot of the crypto billionaires by spreading the FUD in the market then crashing it and then invest their millions of dollars. We are in the market which is pseudo-anonymous so many possibilities are there for the current scenario.

These cycles are always happening all year around. I see it as very normal trend in bitcoin world now.

If the bitcoin started with the bullish trend now then it’s the right time to think about next ATH target.

Since the world is slowly getting to started with economic crashes and at the same time business and individuals are looking for the refugees all over to invest and grow. Bitcoin is stomping ground for this and this will push it further.

[DrBeer]

Today, in addition to the well-known problems with Evergrande, another one has been added - the construction company Fantasia was unable to pay out about $ 300 million, and also put the second developer in China, Country Garden, at risk. The chain reaction has begun ...
PS Just 1 month ago, Fantasia, in a report to investors, cheerfully reported that the company has excellent liquidity, that there are no problems, and there are no hints of problems either, and there are not even hints of any problems on the horizon...

[goldkingcoiner]

As some people in this thread have already mentioned, I don' think the whole evergrand fiasco will have a large (or even medium) effect on bitcoin. It seems to me that the whole ordeal is being artificially blown of out proportion out of political reasons.

I would not trust any information coming out of China in the first place. China is very well known to lie whenever it suits them and Evergrand may just be some sort of scheme or state strategy. 

[hello_good_sir]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

I think that in terms of the stock market, expect a lot more bearishness to come.

This is not the worst by any means. There are many other firms that are waiting in line to fail.

Plus, Evergrande has not been bailed out or survived all of their future payment deadlines... Keep that in mind.

[McCludel]

In my opinion the Evergrande situation is far from solved, we will see how it develops during the coming weeks / months.

Chinese government is apparently opting for a "soft bailout", for example purchasing Evergrande's stockholdings in other sector unrelated companies or subsidizing directly home buyers who have already paid for their homes but will not be receiving them. 

The question is if the problem is exclusive to Evergrande or if it affects generally to the other Chinese real estate developers, which is probably the case.

[poldanmig]

As some people in this thread have already mentioned, I don' think the whole evergrand fiasco will have a large (or even medium) effect on bitcoin. It seems to me that the whole ordeal is being artificially blown of out proportion out of political reasons.

From some news I've read, it says that now the impact of the Evergrande crisis, which is at risk of bankruptcy, has been felt in the world and recently it's even been reported that several other Chinese companies are also starting to experience a crisis and of course this triggers panic among investors in China, this can trigger a global economic crisis because Evergrande is a large company that has many branches and also various business sectors in various countries, I think if evergrande conditions continue to deteriorate, of course it will have an impact on the stock market and bitcoin, because now bitcoin is starting to be more integrated in global financial markets, so it is more responsive to changes in investors risk appetite that drives global sentiment.

[mindrust]

It is a nothing burger. The markets didn't care about it at all and most importantly, bitcoin did fine. If you are dumb enough to lend money to China, that's your problem. The rest of the markets won't give a flying damn about it.

[Wind_FURY]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.

THEN that’s all we need to know. It’s showing everyone, both HODLers, and HATErs, that Satoshi’s thesis is working in practice. The billionaires are HODLing as a hedge to what I believe will be hyper-inflation. Will Jerome Powell be a Volker? I believe there’s no man in the Fed today who would do what Volker did.

[tyz]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times

should shut the f*ck up, and the Chinese government should deal with the situation.

If there is a domino effect, then the Chinese government will certainly put up a bailout umbrella if it has not already been activated. Evergrande has 300 billion in debt, according to official figures. Part of this can certainly be covered by the assets. The rest would then be no problem for the government to settle. In Europe, there was a much larger bailout in 2010-2014. The problem is rather the shadow banking system, where nobody knows who is involved and whether the debts are in reality much higher. A comparison with Lehman is wrong in my opinion, because the situation is different.

[ChiBitCTy]

For many this all has not been much of a surprise at all.  My former manager at a large financial firm I used to work for sent me an article one day that was titled something like "the ghost cities of china".  The article predicted exactly what's going on today.  China has had these major real-estate issues for years now and the writing has been on the wall.  How will this all play out? Who knows, China lies about everything, so it's hard to truly know whats going on over there. 

[electronicash]

For many this all has not been much of a surprise at all.  My former manager at a large financial firm I used to work for sent me an article one day that was titled something like "the ghost cities of china".  The article predicted exactly what's going on today.  China has had these major real-estate issues for years now and the writing has been on the wall.  How will this all play out? Who knows, China lies about everything, so it's hard to truly know whats going on over there.  

there are serious problems besides that evergrande debts and  ghost cities of china. the growing threats on the expansions thay build and taiwan conflict which could cause war. but all thes also affecting other nations as this all started with money printing.

if china prints their currency too thru the CBDC, the debts of other countries to china will also starts to bubble up. all countries with trade relations to china has to keep printing money from now on.
this will lead to BTC domination.

[fiulpro]

Some may find this piece informative.

Goldman Flags $8.2 Trillion Threat Worse Than China Evergrande

Sep 30, 2021

The real worry concerning the China Evergrande default drama is the inevitable where-there’s-smoke-there’s-fire paranoia that accompanies debt stumbles.

The most worrisome such blaze, say analysts at Goldman Sachs, is surging local government debt levels that President Xi Jinping’s men have done their best to hide. The default troubles at the globe’s most indebted property development seem like small embers compared to the $8.2 trillion worth of local government financing vehicles outstanding.

And that’s just the LGFVs we know of. The data that Goldman’s Maggie Wei highlights is as of the end of 2020. Clearly, the tally is higher now—perhaps markedly. Ten months ago, these shadowy investment schemes had reached 53 trillion yuan, up from 16 trillion yuan, or $2.47 trillion, in 2013. They now amount to roughly 52% of China’s gross domestic product, topping the official amount of outstanding government debt.

In other words, as scary at the $300 billion Evergrande story might be, Xi’s government has much bigger problems on its hands. The most acute: keeping GDP this year from falling too far below the 6% Beijing hoped to produce without adding to the nation’s bubble troubles.

The forces behind local governments sitting on financing-vehicle debt worth twice the size of Germany’s GDP date back to 2008. Even before the Lehman Brothers crisis, Communist Party dynamics encouraged municipal borrowing binges. The way local officials got attention in Beijing—and rose to national prominence—was producing above-average GDP rates.

https://www.forbes.com/sites/williampesek/2021/09/30/goldman-flags-82-trillion-threat-worse-than-china-evergrande/

It appears china has an outstanding $8.2 trillion LGFV (local government financing vehicles outstanding) bubble to rival the united states student loan or housing bubbles.

China's economy is still rolling along despite chinese banks defaulting and needing to be bailed out. Coupled with many catastrophic articles published about large chinese enterprises failing across the board.

The united states war in the middle east is claimed to have costed more than $12 trillion by some sources. If china pursues war against hong kong, taiwan and neighboring territories. What would the cost be? Military technology in a modern age is so overwhelmingly expensive, it could carry the potential to make war too expensive an option to pursue, without eventually bankrupting warring nations.

With the individual cost of sophisticated missiles rivaling the cost of a lamborghini. At a certain point, launching lambos at foreign countries would have to become economically unfeasible, is it fair to say.

I do think that with the Crisis lurking right around the corner, the people would have a hard time trusting the normal currencies. The fiat might become obsolete in many Nations.

We might see people flocking to invest in cryptocurrencies like Bitcoins. At the end of the day, they might work exactly how they worked in the pandemic, despite the whole crisis people were still earning, making money, therefore I do think it might not be such a bad news for Bitcoins, if it was able to take the hit from China, we might already be looking at something made stronger by endless attacks from banks, governments and everything else as well.

Nothing to worry about it, it's not going to affect bitcoin since it's not crypto related. Plus it's not really our problem since it's China's internal problem and no matter how I look at it, I always see that it can only affect China alone so it's much better.

The fact is, the Chinese government is long set to release their own token, their own so called crypto, which is nothing but fiat2.0, they have been giving hints about banning bitcoins and other cryptocurrencies since ages therefore I do think that, this step was due from their side, they already were giving hints, so it should not be a shock to us.

[Kittygalore]

Why would anyone watch out for China and their forecast that a storm's brewing in the crypto market? They're out of the game, they're doing that just to make sure that they're own bitcoin's grow and they can buy more, they don't have stake in it besides the fact that they're manipulating the market to grow their bitcoin portfolio.

[bitgolden]

I would say that China grew way faster than they anticipated and that is why I believe they are living this problem right now. This doesn't mean that they will end up with something worse than USA, but it is obvious that we are seeing something that is building up to be something that is very difficult for a whole nation at least. China is also "helping" underdeveloped nations by building stuff there to make those nations better and then charge for it (business basically) which will be stopped or at least halt for a while, so it will impact some other nations as well.

Long story short this will not be good obviously, but it will not be horrible neither, doubt it would rival 2008 or 2020, it will probably be a temporary crash and then it will go back up and become better later on. Even 2008 got better eventually so I doubt this will matter too much.

[Wind_FURY]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times

should shut the f*ck up, and the Chinese government should deal with the situation.

If there is a domino effect, then the Chinese government will certainly put up a bailout umbrella if it has not already been activated. Evergrande has 300 billion in debt, according to official figures. Part of this can certainly be covered by the assets. The rest would then be no problem for the government to settle. In Europe, there was a much larger bailout in 2010-2014. The problem is rather the shadow banking system, where nobody knows who is involved and whether the debts are in reality much higher. A comparison with Lehman is wrong in my opinion, because the situation is different.

China will produce an “ACT” that makes it “LOOK” like it will not do a bail-out, but it will have no other choice and the CCP will actually do the bail-out. I’m very confident that China’s government will BRRR-print the Yuan on 2022.

[Betwrong]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times

should shut the f*ck up, and the Chinese government should deal with the situation.

If there is a domino effect, then the Chinese government will certainly put up a bailout umbrella if it has not already been activated. Evergrande has 300 billion in debt, according to official figures. Part of this can certainly be covered by the assets. The rest would then be no problem for the government to settle. In Europe, there was a much larger bailout in 2010-2014. The problem is rather the shadow banking system, where nobody knows who is involved and whether the debts are in reality much higher. A comparison with Lehman is wrong in my opinion, because the situation is different.

China will produce an “ACT” that makes it “LOOK” like it will not do a bail-out, but it will have no other choice and the CCP will actually do the bail-out. I’m very confident that China’s government will BRRR-print the Yuan on 2022.

Yep. In fact, Evergrande is too big to fail, indeed, and CCP  knows it. And printing Yuan more than usually maybe will not be necessary. I mean, they are printing it all the time, and in a country that big, it goes almost unnoticeable. That's how people close to power become billionaires in such regimes: they convert newly printed local money to hard currencies before the exchange rate will start declining.

[FanEagle]

It is obvious that this is a problem for China, and yes it will have a bit of impact in other parts of the world but not in the big nations of the west, hence it is not a global issue, it is only an issue for China and all the nations that benefit from China which is just some small nations china helps that's it.

So, I would assume that bitcoin will not be impacted at all and we could ignore it if our nation is not getting too much benefit from them. USA was different because USA had interests all over the world and the moment 2008 happened even Spain, Italy, Greece all got gutted and that is why I believe we should not be comparing the two. I believe China banned crypto at the very right time, just ignore them the way they ignored us.

[alpamar99]

apart from that we never know what is happening in the area because there is a lot of news about China but all come from sources which are indeed very difficult to see the truth because when we look at China it seems like nothing has happened but there are so many problems in it.
There are so many examples of cases that were really covered up by the government there, such as at the beginning of the Covid-19 outbreak, besides that there was news about abandoned real estate there and now news that has happened recently.
we always see news that has been filtered by China itself and news that may be shocking will not come out easily about the current conditions in China.
and it's clear their government is covering it up.

but whatever it is, bitcoin remains a bitcoin that will not be affected by anything even though there is a lot of negative news from china.

[timerland]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

Crisis not averted, but crypto is going to be completely independent of this anyhow.

We've seen how strongly crypto has rebounded during COVID as well as the Evergrande crisis in the beginning stages.

People will start realizing that fiat economy woes have nothing to do with bitcoin or other decentralzed cryptos, period. There will probably be more defaults but bitcoin is also an asset class of its own.

[Wind_FURY]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times

should shut the f*ck up, and the Chinese government should deal with the situation.

If there is a domino effect, then the Chinese government will certainly put up a bailout umbrella if it has not already been activated. Evergrande has 300 billion in debt, according to official figures. Part of this can certainly be covered by the assets. The rest would then be no problem for the government to settle. In Europe, there was a much larger bailout in 2010-2014. The problem is rather the shadow banking system, where nobody knows who is involved and whether the debts are in reality much higher. A comparison with Lehman is wrong in my opinion, because the situation is different.

China will produce an “ACT” that makes it “LOOK” like it will not do a bail-out, but it will have no other choice and the CCP will actually do the bail-out. I’m very confident that China’s government will BRRR-print the Yuan on 2022.

Yep. In fact, Evergrande is too big to fail, indeed, and CCP  knows it. And printing Yuan more than usually maybe will not be necessary. I mean, they are printing it all the time, and in a country that big, it goes almost unnoticeable. That's how people close to power become billionaires in such regimes: they convert newly printed local money to hard currencies before the exchange rate will start declining.

Or the CCP could have best of both situations, maintain their reputation and save the economy. They let Evergrande crash as a company, but pump money in to save housing projects and developments for the people who already paid for their houses. The CCP could also do what the Bank of Japan did, become the largest owner of their nation’s companies. PRINT MONEY, BUY EVERYTHING.

[SquallLeonhart]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.

The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.

Do you think that we can consider this crisis solved or should we really expect another little bearish move?

I believe the company could still go bankrupt, and CCP should just finish the job and give everyone the houses. I hate companies getting away with stuff and by the looks of it even in a communist dictatorship there could be a bailout, which is not good at all. I hate companies getting away with stuff and people are getting nothing in return.

So, the best way to handle this would be giving everyone the houses they paid for, even if they paid less than what they should so far and not the whole thing, just give people the houses because that is already a good thing for the public, and then let the company bankrupt, call it even and not ask for more debt from the owners. That way you have a company that got away with being bad without paying any debt, a public that has a lot more people with houses and a government that would be applauded for doing it.

[Wind_FURY]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.

The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.

Do you think that we can consider this crisis solved or should we really expect another little bearish move?

I believe the company could still go bankrupt, and CCP should just finish the job and give everyone the houses. I hate companies getting away with stuff and by the looks of it even in a communist dictatorship there could be a bailout, which is not good at all. I hate companies getting away with stuff and people are getting nothing in return.

So, the best way to handle this would be giving everyone the houses they paid for, even if they paid less than what they should so far and not the whole thing, just give people the houses because that is already a good thing for the public, and then let the company bankrupt, call it even and not ask for more debt from the owners. That way you have a company that got away with being bad without paying any debt, a public that has a lot more people with houses and a government that would be applauded for doing it.

I believe the bond holders holding the debt issued by Evergrande would not be the priority of the CCP. The priority would only be those people who already paid, to be getting their houses, which might make the CCP print less Yuan. But would the CCP want an era of economic stagnation? CCP - “PRINT THE MONEY”, BRRR!

[LUCKMCFLY]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

What in my opinion results from everything China does is that they want to have world attention, they want the world to revolve around them, since the pandemic that came from there has monopolized all the attention, and it is normal, if we take taking into account that after the Second World War there has always been the hegemony of the US dollar, the Chinese have always wanted to dominate the world widely in every way.

 When they talked about the prohibition of crypto, mining, in 2018 it did give a great bearish impact to the market, now in 2021 where it is known that the best world economy is China, because they are the only ones that are very stable economically, want to have control, hegemony and attention for them, it is for this reason that any Chinese attack on bitcoin and cryptocurrencies no longer has any impact, firstly because it is a government that does it, and if we take into account the irreverence of people towards it. government, the dynasties in 2021 no longer have an effect on humanity or money.

[doomloop]

I don’t think crisis is much of a problem in the cryptocurrency market. We have sentence that similar to that take place on they don’t affect the market price in any way at all. Maybe it might have an effect in the Fiat or the economy of that particular country where it took place, but as for cryptocurrency, is it totally different thing. So, there’s no way that is going to have any effect at all.

The price of Bitcoin is already going up so I don’t think we should be expecting any negative impact this time around. That’s it for me, and I strongly believe that is how it’s going to be.

[Wind_FURY]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

What in my opinion results from everything China does is that they want to have world attention, they want the world to revolve around them, since the pandemic that came from there has monopolized all the attention, and it is normal, if we take taking into account that after the Second World War there has always been the hegemony of the US dollar, the Chinese have always wanted to dominate the world widely in every way.

 When they talked about the prohibition of crypto, mining, in 2018 it did give a great bearish impact to the market, now in 2021 where it is known that the best world economy is China, because they are the only ones that are very stable economically, want to have control, hegemony and attention for them, it is for this reason that any Chinese attack on bitcoin and cryptocurrencies no longer has any impact, firstly because it is a government that does it, and if we take into account the irreverence of people towards it. government, the dynasties in 2021 no longer have an effect on humanity or money.

They want to risk an economic recession, and risk an uprising because of said economic recession because they simply want “World Attention”? I believe not. Obviously it’s because, MANY officials in their bureaucracy have been sleeping behind the wheel.

[Betwrong]

~

Or the CCP could have best of both situations, maintain their reputation and save the economy. They let Evergrande crash as a company, but pump money in to save housing projects and developments for the people who already paid for their houses. The CCP could also do what the Bank of Japan did, become the largest owner of their nation’s companies. PRINT MONEY, BUY EVERYTHING.

Actually it's interesting to what extent this money printing business can expand without causing significant inflation? I mean, we all know that in countries like Zimbabwe and Venezuela the process of depreciation starts developing pretty soon after the money printing press starts working more than usually. But what about countries like the US, China and Japan? Sometimes I think that they can allow themselves to print as much money as they need to deal with an unexpected situation such as Evergrande.

[PrimeNumber7]

Some may find this piece informative.

...

It appears china has an outstanding $8.2 trillion LGFV (local government financing vehicles outstanding) bubble to rival the united states student loan or housing bubbles.
...

My interpretation of this data is quite different. Firstly, the fact that there is debt does not mean there is a bubble. A bubble is created when stuff is bought for the only reason of selling it more expensive to someone else. You may argue that there might be a credit risk, but these loans against vehicles are quite different from loans against houses particularly coming from the gov. which would endure even massive defaults or print a bit of cash.

Local Chinese governments receive a lot of their revenue from selling land for development. Even if Evergrande does not ultimately fail, it will likely slow the rate at which it starts new projects, as will other developers. This will negatively affect local governments' finances in China. Also, the fact that the debt is hidden from the public is problematic because once the debt is discovered, creditors will be more hesitant to lend to local governments. Most government debt is paid off by selling more debt (something similar to refinancing the debt), and if governments are unable to raise more money via the credit markets, it becomes more likely they will default.

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times



should shut the f*ck up, and the Chinese government should deal with the situation.

It is not trivial for the Chinese government to bail out a company as big as Evergrande. The Chinese government cannot issue massive amounts of debt the same way the US government can, and the interest rate it needs to pay is almost twice that of what the US government pays.

There are also political problems with bailing out Evergrande. If Evergande gets bailed out, the government will start to get blamed when Evergrande cannot deliver homes on time.

[MNbag]

It will affect Bitcoin anyway.

Investors would be less likely to buy it, leading to prices falling as a result.

It isn't independent from the rest of the economy, it can be affected by a recession.

[justdimin]

What in my opinion results from everything China does is that they want to have world attention, they want the world to revolve around them, since the pandemic that came from there has monopolized all the attention, and it is normal, if we take taking into account that after the Second World War there has always been the hegemony of the US dollar, the Chinese have always wanted to dominate the world widely in every way.

 When they talked about the prohibition of crypto, mining, in 2018 it did give a great bearish impact to the market, now in 2021 where it is known that the best world economy is China, because they are the only ones that are very stable economically, want to have control, hegemony and attention for them, it is for this reason that any Chinese attack on bitcoin and cryptocurrencies no longer has any impact, firstly because it is a government that does it, and if we take into account the irreverence of people towards it. government, the dynasties in 2021 no longer have an effect on humanity or money.

China will always do something that will help CCP and not directly china. Sure there are times when what benefits CCP also benefits China so it looks like a good thing, but it is 100% obvious that even if it hurts China as a whole, if it benefits CCP they will do it. This is why they banned crypto as well, do you really think that billions of dollars coming into China from other nations somehow hurt china? Of course it did not hurt china, it helped china a ton, at least Chinese people were capable of making much more profit and they were capable of living a great life. Then why did the ruler of China banned something that helped China?

Well, simply because they are only interested in ruling and not interested in making it better. This is why it ended up being something that hurt them instead of something that helped them and they banned it, only because it would weaken the powerful.

[Fortify]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

I think due to the very way the Chinese government is structured a lot of problems are hidden away and buried as deep as possible all along the chain. It does seem like most of the fallout of this Evergrande crisis should be contained within China, although it will make a lot of people very angry because the collateral is millions of people have lost the biggest investment they'll ever make (property). There is also likely to be a domino effect throughout the whole property market because every building related company will now face borrowing and liquidity problems because lenders will be avoiding them for a while. The government is unlikely to bail them out, internal investors seem to be getting priority of any payments due which is going to turn foreign investors off China for a while since that trust is broken.

[davis196]

I agree that the biggest problem of China is the local governments debt,not Evergrande.
However,I think that the central government of China and the PBOC have enough reserves to support the local governments to pay their debts,at least for a while.The reserves aren't that big,the huge crisis with come,when China runs out of it's foreign currency reserves.AFAIK,China owns lots of US government bonds.
They could sell the US bonds and get some cash in order to pay off the debts of the provinces.
The economic growth of China seems like a bubble that will pop some day.I'm sure that the new Great Depression will begin from China,not from the USA.

[Betwrong]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times



should shut the f*ck up, and the Chinese government should deal with the situation.

It is not trivial for the Chinese government to bail out a company as big as Evergrande. The Chinese government cannot issue massive amounts of debt the same way the US government can, and the interest rate it needs to pay is almost twice that of what the US government pays.

Can you say a bit more on this? I'm not that good in economics to know such nuances. I just think that GDP roughly shows the size of an economy. And since China's estimated GDP for this year($16.6 trillion) is huge in comparison to Evergrande's debt, $310 billion, I thought the Chinese government could cope with the situation. But maybe it's not that simple.

There are also political problems with bailing out Evergrande. If Evergande gets bailed out, the government will start to get blamed when Evergrande cannot deliver homes on time.

Also I think if bailed out, Evergrande has low chances of failing to deliver homes on time. But again, it's an opinion of dilettante in economics. So, if you have time please explain.

[beerlover]

I agree that the biggest problem of China is the local governments debt,not Evergrande.
However,I think that the central government of China and the PBOC have enough reserves to support the local governments to pay their debts,at least for a while.The reserves aren't that big,the huge crisis with come,when China runs out of it's foreign currency reserves.AFAIK,China owns lots of US government bonds.
They could sell the US bonds and get some cash in order to pay off the debts of the provinces.
The economic growth of China seems like a bubble that will pop some day.I'm sure that the new Great Depression will begin from China,not from the USA.

I do believe that we should not be considering China as a great power if they fail to keep growing with debt. I mean look at the situation they are in right now, it is obvious that they should be able to grow with the man power they have, and they still fail compared to places that have quarter the amount of people they have with so much more wealth. I believe CCP will eventually fail not because they are not good at finances, but because of human rights problems.

There are other smaller and poorer nations that keep on saying they are willing to work for cheaper and western nations started to listen to them as well which is looking like taking away jobs from China and moving to other smaller nations. This is the real reason why China is losing, because they grew big and everyone is hating how they are treating both their citizens and everyone else so they are looking for other nations.

[PrimeNumber7]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times



should shut the f*ck up, and the Chinese government should deal with the situation.

It is not trivial for the Chinese government to bail out a company as big as Evergrande. The Chinese government cannot issue massive amounts of debt the same way the US government can, and the interest rate it needs to pay is almost twice that of what the US government pays.

Can you say a bit more on this? I'm not that good in economics to know such nuances. I just think that GDP roughly shows the size of an economy. And since China's estimated GDP for this year($16.6 trillion) is huge in comparison to Evergrande's debt, $310 billion, I thought the Chinese government could cope with the situation. But maybe it's not that simple.

Countries cannot trivially borrow their entire GDP.

I might compare China bailing out Evergrande as comparable to someone making $100k/year, with no savings and already in debt to the tune of around $77k, and needing to take out a $2k loan. A lender might approve the loan but might not give this borrower its best terms. This person's other lenders also might react negatively to this person taking on this additional debt and might start offering worse terms when the borrower goes to refinance their debt as it comes due.

If Evergrande were to get bailed out, the Chinese government would be implicitly guaranteeing the entire $310bn in debt that Evergrande has, and China's other creditors would act accordingly.

There are also political problems with bailing out Evergrande. If Evergande gets bailed out, the government will start to get blamed when Evergrande cannot deliver homes on time.

Also I think if bailed out, Evergrande has low chances of failing to deliver homes on time. But again, it's an opinion of dilettante in economics. So, if you have time please explain.

As far as I am aware, Evergrande not delivering their homes on time is in part being caused by poor market conditions, and not entirely because of poor management. If this is being caused by poor management, the Chinese government can replace Evergrande's managers, however, there is no guarantee the new managers can improve things enough.

Part of the reason why Evergrande has been struggling is that the Chinese government has taken steps to cool the housing market. The CCP wants to prevent the housing market from turning into a bubble that eventually pops, and having to deal with the associated social unrest to that happening. It is possible the Chinese government's actions have already damaged the housing market too much to prevent major declines in housing prices.

[mindrust]

Stocks keep climbing up, crypto keep climbing up. As I suspected evergrande was just a nothing burger. $300 billion debt? Pff. Just print another trillion USD, USDT or CNY and it means nothing. Maybe we haven't seen its real potential impact on the markets. That's a possibility too but as the times goes by, the chances of a big crash is getting lower and lower.

[oHnK]

Stocks keep climbing up, crypto keep climbing up. As I suspected evergrande was just a nothing burger. $300 billion debt? Pff. Just print another trillion USD, USDT or CNY and it means nothing. Maybe we haven't seen its real potential impact on the markets. That's a possibility too but as the times goes by, the chances of a big crash is getting lower and lower.

Actually, if you look at the current conditions, we will not see a major economic crisis in the country because the government immediately backed up this problem and became a problem for the government.  But if you say by printing money, the problem is solved, I don't think that's the way to do it because it will cause another domino effect, namely big inflation.  The condition of their debt is already very large, even greater than the debt of my country as a whole, it is natural for people to be worried about the default conditions they are experiencing.

[mindrust]

Stocks keep climbing up, crypto keep climbing up. As I suspected evergrande was just a nothing burger. $300 billion debt? Pff. Just print another trillion USD, USDT or CNY and it means nothing. Maybe we haven't seen its real potential impact on the markets. That's a possibility too but as the times goes by, the chances of a big crash is getting lower and lower.

Actually, if you look at the current conditions, we will not see a major economic crisis in the country because the government immediately backed up this problem and became a problem for the government.  But if you say by printing money, the problem is solved, I don't think that's the way to do it because it will cause another domino effect, namely big inflation.  The condition of their debt is already very large, even greater than the debt of my country as a whole, it is natural for people to be worried about the default conditions they are experiencing.

Quite right. The thing is, nobody cares about the inflation neither. At least not now. Maybe they will care when a loaf of bread becomes $500. I don't know. So far it is not that bad. Maybe we are right at the beginning of the collapse. Nobody really knows. I guess we'll have to live and find out.

[Rasa nanas]

yes that's right, there is no point in making a FUD because bitcoin will definitely recover again.
it looks like this crisis is over because currently bitcoin is back on the positive trend path and will most likely break a new ATH this month. FUD will give a slight correction to the bitcoin price, but after that it will recover quickly because many people consider it an opportunity to get bitcoin at a cheaper price.

[Betwrong]

Can you say a bit more on this? I'm not that good in economics to know such nuances. I just think that GDP roughly shows the size of an economy. And since China's estimated GDP for this year($16.6 trillion) is huge in comparison to Evergrande's debt, $310 billion, I thought the Chinese government could cope with the situation. But maybe it's not that simple.

Countries cannot trivially borrow their entire GDP.

I might compare China bailing out Evergrande as comparable to someone making $100k/year, with no savings and already in debt to the tune of around $77k, and needing to take out a $2k loan. A lender might approve the loan but might not give this borrower its best terms. This person's other lenders also might react negatively to this person taking on this additional debt and might start offering worse terms when the borrower goes to refinance their debt as it comes due.

If Evergrande were to get bailed out, the Chinese government would be implicitly guaranteeing the entire $310bn in debt that Evergrande has, and China's other creditors would act accordingly.

I think I get it now, thank you for this great explanation! I think now I need only one clarification. In your example saying "already in debt to the tune of around $77k" did you mean that China's debt is expected to reach 69% of GDP by the end of 2021?

As far as I am aware, Evergrande not delivering their homes on time is in part being caused by poor market conditions, and not entirely because of poor management. If this is being caused by poor management, the Chinese government can replace Evergrande's managers, however, there is no guarantee the new managers can improve things enough.

Part of the reason why Evergrande has been struggling is that the Chinese government has taken steps to cool the housing market. The CCP wants to prevent the housing market from turning into a bubble that eventually pops, and having to deal with the associated social unrest to that happening. It is possible the Chinese government's actions have already damaged the housing market too much to prevent major declines in housing prices.

I think this shows that with a centrally planned economy government can harm its country even when having good intentions.

[oHnK]

Quite right. The thing is, nobody cares about the inflation neither. At least not now. Maybe they will care when a loaf of bread becomes $500. I don't know. So far it is not that bad. Maybe we are right at the beginning of the collapse. Nobody really knows. I guess we'll have to live and find out.

Yes, maybe people only realized when the price of the bread they bought had reached that value.  However, if we talk about the case of evergrade debt, then this is actually a regional case, on the other hand, because the debt value is very large and attracts their banking sector, even 128 banks are involved in their debt, then this is something that must be addressed properly because default conditions will result in  causing angry investors and the impact of rising unemployment and economic instability in the financial sector.  If the financial sector is unstable, it will very likely disrupt the liquidity of national payments.

[jaysabi]

I agree that the biggest problem of China is the local governments debt,not Evergrande.
However,I think that the central government of China and the PBOC have enough reserves to support the local governments to pay their debts,at least for a while.The reserves aren't that big,the huge crisis with come,when China runs out of it's foreign currency reserves.AFAIK,China owns lots of US government bonds.
They could sell the US bonds and get some cash in order to pay off the debts of the provinces.
The economic growth of China seems like a bubble that will pop some day.I'm sure that the new Great Depression will begin from China,not from the USA.

I do believe that we should not be considering China as a great power if they fail to keep growing with debt. I mean look at the situation they are in right now, it is obvious that they should be able to grow with the man power they have, and they still fail compared to places that have quarter the amount of people they have with so much more wealth. I believe CCP will eventually fail not because they are not good at finances, but because of human rights problems.

There are other smaller and poorer nations that keep on saying they are willing to work for cheaper and western nations started to listen to them as well which is looking like taking away jobs from China and moving to other smaller nations. This is the real reason why China is losing, because they grew big and everyone is hating how they are treating both their citizens and everyone else so they are looking for other nations.

Who is going to rise up in China when they have no access to information other than what the party allows them  to know and no weapons to fight with?  It's not like America where guns are readily available, let along military-style weapons.  The last time people rose up they got crushed in Tienanmen Square, and yet the people don't really even know this happened because references to it are illegal in China and it's been scrubbed from public knowledge.  Everything the party does now is to cut off dissent before it happens.  That's why Hong Kong and Taiwan are such threats to the party, having open societies of culturally similar people so close to them undermines the way the party runs things and gives people ideas about life being better without them.  That's why the party isn't willing to tolerate them being independent.  So, no, I don't think their track record on human rights is really going to inspire an uprising because people can't organize and don't have weapons.

[perryxi2]

I just read the news about the Evergrande Crisis. Stock markets, especially in Asia, are on high alert as Chinese real estate developer Evergrande faces the threat of a bust. debt.Evergrande Group, or Hengdai Group, is one of the largest real estate developers in China. This group is currently in the Global 500 list by Fortune magazine every year. However, in recent years, Evergrande has gradually fallen into debt because it constantly borrows to pay and compensate for its investment ambitions in many fields.

[PrimeNumber7]

Can you say a bit more on this? I'm not that good in economics to know such nuances. I just think that GDP roughly shows the size of an economy. And since China's estimated GDP for this year($16.6 trillion) is huge in comparison to Evergrande's debt, $310 billion, I thought the Chinese government could cope with the situation. But maybe it's not that simple.

Countries cannot trivially borrow their entire GDP.

I might compare China bailing out Evergrande as comparable to someone making $100k/year, with no savings and already in debt to the tune of around $77k, and needing to take out a $2k loan. A lender might approve the loan but might not give this borrower its best terms. This person's other lenders also might react negatively to this person taking on this additional debt and might start offering worse terms when the borrower goes to refinance their debt as it comes due.

If Evergrande were to get bailed out, the Chinese government would be implicitly guaranteeing the entire $310bn in debt that Evergrande has, and China's other creditors would act accordingly.

I think I get it now, thank you for this great explanation! I think now I need only one clarification. In your example saying "already in debt to the tune of around $77k" did you mean that China's debt is expected to reach 69% of GDP by the end of 2021?

Including debts of local governments, some of which is hidden from the public, there are some estimates that the debt to GDP ratio is somewhere in the range of 0.77.

To put China's ability to raise money via credit markets into perspective when compared to the liabilities they would be taking on in bailing out Evergrande, in late 2020, China raised US$6 billion via bond sales, and this was the most it had ever raised at once via dollar-denominated bonds and matched the amount it had raised the prior year. China was recently able to sell $4 billion in dollar-denominated bonds. It could probably sell more in bonds denominated in its local currency.

As far as I am aware, Evergrande not delivering their homes on time is in part being caused by poor market conditions, and not entirely because of poor management. If this is being caused by poor management, the Chinese government can replace Evergrande's managers, however, there is no guarantee the new managers can improve things enough.

Part of the reason why Evergrande has been struggling is that the Chinese government has taken steps to cool the housing market. The CCP wants to prevent the housing market from turning into a bubble that eventually pops, and having to deal with the associated social unrest to that happening. It is possible the Chinese government's actions have already damaged the housing market too much to prevent major declines in housing prices.

I think this shows that with a centrally planned economy government can harm its country even when having good intentions.

Centrally planned economies will always do far worse than a free market. This has repeatedly been shown to be the case. With that being said, small amounts of government regulation is not a bad thing, especially when it comes to preventing particular sectors from becoming overheated.

The Chinese economy has not had any "ebbs" in the natural "ebbs and flows" cycle of economies. As such, it is likely the Chinese economy is running vastly hotter than it should be if free-market economics were allowed. For example, state-owned banks were required to loan money to state-owned businesses at terms that would not normally be made by a bank using reasonable underwriting standards. This prevented mediocre businesses from failing or getting bought out by more successful businesses.

[tyz]

Stocks keep climbing up, crypto keep climbing up. As I suspected evergrande was just a nothing burger. $300 billion debt? Pff. Just print another trillion USD, USDT or CNY and it means nothing. Maybe we haven't seen its real potential impact on the markets. That's a possibility too but as the times goes by, the chances of a big crash is getting lower and lower.

300 billion USD is indeed not that much, especially when you consider that Evergrande also owns a lot of real estate that is available as a counterpart and therefore the actual debt ratio is much lower. But the problem is another one: Nobody knows which companies are in the debt swamp, too, and besides, many experts doubt that the 300 billion are all debts and that in reality there are much more, also due to the shadow banking system in China. I think the issue of Evergrade will keep us busy for some time, even though share prices are rising again and China stocks were upgraded by rating agencies yesterday.

[darewaller]

Including debts of local governments, some of which is hidden from the public, there are some estimates that the debt to GDP ratio is somewhere in the range of 0.77.

To put China's ability to raise money via credit markets into perspective when compared to the liabilities they would be taking on in bailing out Evergrande, in late 2020, China raised US$6 billion via bond sales, and this was the most it had ever raised at once via dollar-denominated bonds and matched the amount it had raised the prior year. China was recently able to sell $4 billion in dollar-denominated bonds. It could probably sell more in bonds denominated in its local currency.

China is in big debt not because they didn't manage their finances badly but mainly because they have debt unpaid to them as well, the biggest one is USA, they have so much money that USA needs to pay them but doesn't and that makes China become super broke because they are not getting the trillions they should be getting from USA.

This is an awesome move by USA if you consider it, they are using their biggest competition as a manufacturer and then making profit from it all over the world and then they say "here is a paper that says I owe you" and then get out, they are not actually giving the money itself, they are saying that "here takes this money that says I owe you money, when you want to buy something you can give this to other nations" and then other nations do take it as well but China can't cover inside stuff with it. It is really genius move.

[PrimeNumber7]

Including debts of local governments, some of which is hidden from the public, there are some estimates that the debt to GDP ratio is somewhere in the range of 0.77.

To put China's ability to raise money via credit markets into perspective when compared to the liabilities they would be taking on in bailing out Evergrande, in late 2020, China raised US$6 billion via bond sales, and this was the most it had ever raised at once via dollar-denominated bonds and matched the amount it had raised the prior year. China was recently able to sell $4 billion in dollar-denominated bonds. It could probably sell more in bonds denominated in its local currency.

China is in big debt not because they didn't manage their finances badly but mainly because they have debt unpaid to them as well, the biggest one is USA, they have so much money that USA needs to pay them but doesn't and that makes China become super broke because they are not getting the trillions they should be getting from USA.

This is an awesome move by USA if you consider it, they are using their biggest competition as a manufacturer and then making profit from it all over the world and then they say "here is a paper that says I owe you" and then get out, they are not actually giving the money itself, they are saying that "here takes this money that says I owe you money, when you want to buy something you can give this to other nations" and then other nations do take it as well but China can't cover inside stuff with it. It is really genius move.

I have been told this before by a conservative professor, and I used to believe it. I now think this is somewhat flawed reasoning.

Even though the US is ultimately paying for these manufactured goods with not-money, actual money is flowing to Chinese workers, and to the Chinese economy. These same jobs would otherwise be available elsewhere, including potentially in the United States. Some of these lost jobs will ultimately cost the US economy money on an ongoing basis, meaning we will have to continue borrowing from China in order to support some of these people who lost their jobs. This is all fine and dandy today, however, if tomorrow, China decides it no longer wishes to continue lending to the US, the government will no longer be able to support these people who lack the resources to provide for themselves.

The US has become to rely on China for manufactured goods. If China were to decide they no longer wanted to sell us these manufactured goods, the US would have problems and would be unable to acquire these goods. The US economy largely relies on these imports from China. The useful life of products the US imports from China is very short when compared to the useful life of goods the US exports to China. This allows China to potentially influence the US, and will give them an advantage in the event of a War. The fact that China is a major supplier of medicine such as antibiotics to the US makes the situation all that worse.

Some of the trade imbalance involves China buying up US property, such as real estate and shares of US-listed corporations. This allows China to exert influence on American companies, and local economies. Americans who own shares of Chinese companies have virtually no rights/influence over management.

[cabron]

Including debts of local governments, some of which is hidden from the public, there are some estimates that the debt to GDP ratio is somewhere in the range of 0.77.

To put China's ability to raise money via credit markets into perspective when compared to the liabilities they would be taking on in bailing out Evergrande, in late 2020, China raised US$6 billion via bond sales, and this was the most it had ever raised at once via dollar-denominated bonds and matched the amount it had raised the prior year. China was recently able to sell $4 billion in dollar-denominated bonds. It could probably sell more in bonds denominated in its local currency.

China is in big debt not because they didn't manage their finances badly but mainly because they have debt unpaid to them as well, the biggest one is USA, they have so much money that USA needs to pay them but doesn't and that makes China become super broke because they are not getting the trillions they should be getting from USA.

This is an awesome move by USA if you consider it, they are using their biggest competition as a manufacturer and then making profit from it all over the world and then they say "here is a paper that says I owe you" and then get out, they are not actually giving the money itself, they are saying that "here takes this money that says I owe you money, when you want to buy something you can give this to other nations" and then other nations do take it as well but China can't cover inside stuff with it. It is really genius move.

I have been told this before by a conservative professor, and I used to believe it. I now think this is somewhat flawed reasoning.

Even though the US is ultimately paying for these manufactured goods with not-money, actual money is flowing to Chinese workers, and to the Chinese economy. These same jobs would otherwise be available elsewhere, including potentially in the United States. Some of these lost jobs will ultimately cost the US economy money on an ongoing basis, meaning we will have to continue borrowing from China in order to support some of these people who lost their jobs. This is all fine and dandy today, however, if tomorrow, China decides it no longer wishes to continue lending to the US, the government will no longer be able to support these people who lack the resources to provide for themselves.

The US has become to rely on China for manufactured goods. If China were to decide they no longer wanted to sell us these manufactured goods, the US would have problems and would be unable to acquire these goods. The US economy largely relies on these imports from China. The useful life of products the US imports from China is very short when compared to the useful life of goods the US exports to China. This allows China to potentially influence the US, and will give them an advantage in the event of a War. The fact that China is a major supplier of medicine such as antibiotics to the US makes the situation all that worse.

Some of the trade imbalance involves China buying up US property, such as real estate and shares of US-listed corporations. This allows China to exert influence on American companies, and local economies. Americans who own shares of Chinese companies have virtually no rights/influence over management.

I think they already decided that. That is why the shipping containers piled up on the port of every country today particularly in US. Notice your grocery stores that it has empty shelves.

The Chinese government is also protecting itself and taking advantage of how much the US Government is printing USD and distributing it to people. Even if Americans have money but there is nothing to buy from stores because the supply chains are disrupted and it all started with EVER GIVEN ship blocking the Suez canal.

[Victorycoin]

China's economic activities and inevitably casts a shadow over the world economy evergrande overcomes its crisis, the event will also break the cycle of becoming america's financial and strategic rival on the path to becoming china's second largest economy in the world. Prices can have a negative impact on consumer spending and hurt the economy they added that in the short term, chinese policymakers have the means to reduce the impact of severe damage on the economy.

[oHnK]

China's economic activities and inevitably casts a shadow over the world economy evergrande overcomes its crisis, the event will also break the cycle of becoming america's financial and strategic rival on the path to becoming china's second largest economy in the world. Prices can have a negative impact on consumer spending and hurt the economy they added that in the short term, chinese policymakers have the means to reduce the impact of severe damage on the economy.

Their economic condition is definitely affected by the evergrande case, even if it does not rule out the possibility of dragging other countries because we understand how the bilateral relations that China has built with many countries from an economic point of view.  On the other hand, the US economy which was also sluggish until the publication of the Tappering off policy showed everyone that the world economy was not doing well at the moment.

[mindrust]

Stocks keep climbing up, crypto keep climbing up. As I suspected evergrande was just a nothing burger. $300 billion debt? Pff. Just print another trillion USD, USDT or CNY and it means nothing. Maybe we haven't seen its real potential impact on the markets. That's a possibility too but as the times goes by, the chances of a big crash is getting lower and lower.

As I expected, China bailed out Evergrande and saved it from a bailout. Maybe this is temporary but I know that they can't afford them going bankrupt because it would trigger something bigger. We'll see what will happen when the next bond payment arrives.

They'll probably bail them out again again. If they were going to let them go bankrupt, they would have done it this time but they couldn't do it.