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Pictured above: in The China Trilogy, I write a lot about the country’s economic system, housing and development.
Sixteen years on the streets, living and working with the people of China, Jeff
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Other posts about China’s real estate market and economic system
Jeff J. Brown interviewed on Wall St. for Main St.
Crush the Street’s Kenneth Ameduri interviews China Rising Radio Sinoland’s Jeff J. Brown 170323
China’s real estate sector is a bursting bubble! Collapse here we come! REALLY? China Rising Radio Sinoland 221121
A run on Chinese banks? Don’t believe the West’s Big Lie Propaganda Machine. It can’t happen, since the citizens own them all. China Rising Radio Sinoland 220622
CHINA IS GOING TO COLLAPSE! Not really. Here’s why it cannot happen. China Rising Radio Sinoland 230916
Transcript
This is Jeff J. Brown China Rising Radio Sinoland and the founder of Seek Truth From Facts Foundation and the China Writers Group. I keep hearing a lot, of course, that the West spends billions of dollars to put out fake news and to try to trash China and the Chinese people because they can’t compete on a level playing field. So, all they can do is try to publish as much Big Lie Propaganda Machine vomit as they can to trash them. And I’ve been seeing articles about China’s shaky economy, the real estate bubble is coming around the corner and nobody can find a job and the place is going to hell.
Well, I just was there for a month, the entire month of May and I can tell you that until you see it, you can’t believe what’s going on there and it’s not bad news. It’s good news. And what is the economic system, the communist-socialist economic system? Backed by Buddhism, Daoism, and Confucianism to help serve the people. Mao Zedong famously said, “Serve the people”. And that’s what Xi Jinping and every other leader in China has said, going back 5,000 years in so many words, serve the people.
And I saw a headline Beijing announced the equivalent of US $41.5 billion in financing to help reduce excess housing inventory because of Covid and the economy slowing down from 8 and 10 percent now down to 4 and 5 percent. There was an overbuild of apartments and houses. And of course, everybody says, “Oh, look at all those empty houses”. Well, my wife and I and our daughter actually lived in one of those ghost cities in Beijing from 2010 to 2016 before we moved to Shenzhen for three years, and it was a ghost town when we got there.
And three years later it was filling up with people and businesses and everything else. So, the first thing you need to understand is, is that empty housing doesn’t mean squat in China. Why does it not mean squat? Because all of the banks are owned by the people. All of the green land you can’t buy dirt in China. You cannot buy dirt. All you can do is get a 70-year lease on green dirt or the building that’s on it, just like a McDonald’s will get a 100-year lease in the United States or Europe for the property.
In England, the royal family and the aristocratic upper crust own something like 90-percent of the land. And from what I understand, most of the English have, again, long-term 100-year leases. So, this is not unusual. But instead of the king and the queen owning it in England, it’s owned by the people. The dirt is owned by the people in China. Not only do the people own the banks and all of the green land, but they also own all of the insurance companies. All of the insurance companies are nationalized.
And China is building millions and millions and millions of low-income houses. For us, it would be low-income subsidized housing. And so, I saw this, there’s no other country that will although the United States will do anything in Europe Western capitalist countries will do anything to save the bankers, they don’t give a damn about the people, but they will do anything and everything they can to save the bankers. And, this is actually Chinese financing to help people to buy their house for the first time.
The other problem for China is, is that something between 85 and 90 percent of the people already own their first home. And of those, around 70 percent have them all paid off. So, there are not as many people as you think that need a house, but there are still a lot of young people coming into the economy who do need one. But the fact of the matter is, is that the vast majority, 90 percent of the Chinese actually own their own home. And again, 70 percent of those have actually paid. They owe no debt. They have no debt.
They owe their properties free and clear. And so, I’ll leave this link here. And then another interesting article I saw more than 50 cities relax housing by house home buying policies so they can do anything they want. The people on the banks. The people own the properties and the dirt that they live on. They own the insurance companies. So, they can do whatever they want. They can lower mortgage interest rates. They can lower down payments, or they can raise down payments.
They can do tax abatements, or they can raise taxes if they’re trying to cool off the economy or cool off the housing market, they can call off. They can have loan payment holidays where people don’t have to pay anything for six months. They can do anything they want because they own all of the levers that control the property market. And what’s really interesting is it’s not national. Each province and sometimes even cities will actually implement their own policies. It’s not one big national thing but they will do it is tailored to the local conditions and what the people need.
The one thing also that is making it putting a bit of a damper on the housing market in China is, is they don’t want people investing in rental apartments and rental homes. They want everybody to have one home. And because houses are for people to live in and to own and not to invest in and speculate in. So, there’s another area where in China, you have what’s called the hukou, which is like your birth certificate, and it’s tied to where your family was originally from. It’s more difficult to buy property in China if you’re not in the same province as your hukou. And so, they can also do that. They can relax the hukou requirements.
They can do anything they want. There will never ever be a housing bubble or a housing crash in China. It cannot happen when you own the banks, you own all the land and you own all the insurance companies and the people do. You own everything. You have total control over the real estate market. If a company like Evergrande, which you may have been hearing about has gone bankrupt, it’s a private real estate company. Well, first off, they actually fined the owner half a billion US$ for his malfeasance. And the state will step in and nationalize all of that company’s private real estate, they will come in and nationalize it.
And instead of giving it to Bank of America and Citibank and Barclays and giving those assets to trillionaire banksters for $0.10 on the dollar or ten centimes on the euro, they will actually put that portfolio into state-owned enterprises, which means that these are massive corporations owned by the people because they’re state owned. And so, then they will take over that real estate, write off any bad debt that there may be, make sure that the people who are buying their first home are made whole and don’t lose anything. Outside investors, Western investors, Chinese investors in the stock market, they’re going to lose it all.
And I’m sure that the people who have bought second and third apartments for speculation are going to take a haircut, too. But the people who are buying their first home are always made whole and have no losses. So then that state-owned company will reallocate those real estate assets to their subcompanies, etc., and get them into the hands of people who need to buy their first home. So, it’s so hard for Westerners to understand this. This is not a capitalist country. This is a communist-socialist country. And I even have, I went back and looked at my posts. In 2015, I was on the show Wall Street for Main Street, telling them this.
Then in 2017, I was on Kenneth Omidyar’s show “Crush the Street” and explaining this to him. Then in 2022, I have a one titled “China’s Real Estate Sector Is a Bursting Bubble Collapse. Here we come. Really?” And of course, it never happens. It can’t happen. Then it also in 2022, there was all this garbage about how Chinese banks were going to go under. How can they go under? They’re owned by the people. There can be no runs on Chinese banks. Don’t believe the West Big Lie Propaganda Machine. It can’t happen since the citizens own them all. This is not capitalism. This is communism-socialism.
So, 2015, 2017, 2022, 2022. And then I have another one, China is going to collapse. Not really. Here’s why it can’t happen. And I wrote that in 2023 about eight months ago. It can’t happen. It’s just not going to happen. So, anybody who tells you that and has the Chicken Little Complex about the Chinese economy who is just salivating for something bad to happen to the Chinese economy, it’s not going to happen. And one of these articles, I think it’s maybe the last one. I show a chart where, like in 2017, right before COVID-19, the housing prices in China went up 50 percent in less than a year. I mean, you talk about a bubble.
That’s a bubble, baby. And in the next year and a half, they just took the air out of it and the prices came back down to where they were before the bubble. A six-month bubble, 50 percent property index increase in value. And they let the air out of the bubble in a year and a half. You cannot do that in a capitalist economy. It cannot happen. But it can happen in a communist-socialist country like China. And then another one that I just saw again down here. This is really, really interesting.
There are people now who are saying China needs its own economic theory model which is really not that new. It’s Marxism. But Xi Jinping, the president, they’re now calling what he has come up with, he got a PhD in Marxism and Leninism. So, I think he knows a little bit about Marxism and Leninism and what it can do for the people. They now are talking about Xiconomics because of what he has done for the country and a tremendous transition from 10 percent growth now down to 4 to 5 percent growth plus three years of practically very low growth during the COVID lockdowns.
The Chinese academic economists in China say, “We need to reject the Western Capitalist Economic Theory and develop our own”. And of course, it will be based on the bedrock of Marxism, Leninism, and Maoism. And so that just goes to show you how different the Chinese economic model is. It is not the same thing. It is like what was that? Was that the 18-cylinder Jaguar engine with the long hood running, just purring like a cat? Well, that’s the Chinese economy compared to capitalist countries like in the West in Eurangloland, South Korea, Japan, etc.
And I can also go into the China I also talked about this. Maybe I’ll even find an article or two about their debt. Their debt is a fraction of what it is in the West. And they actually manufacture and produce things and export things with value besides guns and color revolutions and armies and military bases. They actually make things and sell things for money. So, then finally there’s an article “China Committed To Building High-Level Socialist Market Economy, Laying The Foundation For High-Quality Development”.
Again, China’s communist socialist economy is not the same thing. It is a humming machine that works for the people. The economies in the West were like that during the 1930s, 1940s, and 1950s when capitalism got too greedy for its own good with the Great Depression. For those two generations, capitalism helped the people. But by the time the 1970s rolled around, they were already trying to claw back what they gave during the Roosevelt administration and during the postwar in Europe. That golden 30 years in Europe was great from 1945 to 1975.
And then the capitalists started clawing it all back. The banks start clawing it all back. And we see our quality of life and our economic opportunities and economic well-being falling in the West while they are increasing in China. Some food for thought and something to discuss with you and your friends. I’ve got all these articles here you can look at. And this is Jeff J. Brown, China Rising Radio Sinoland, founder of Seek Truth From Facts and the China Writers Group. Bye-bye.
Above: other than when the Soviets left the Chinese in the lurch, 1960, China has been almost recession-free since communist liberation, 1949, and has not had one since 1976, 48 years ago. How many capitalist countries can make this claim? Zero.
Above: other than 1960, Mao-Era China largely outperformed mighty USA, which had 50% of the world’s GDP and was the #1 manufacturer and exporter. This, while the West did everything it could to sabotage the Chinese people, shutting off the country with blockades, boycotts, sanctions and tariffs.
References
Beijing announced US$41.5 billion in financing to help reduce excess housing inventory | May 2024
Chinese first-tier cities lower down payments, mortgage interest rates amid efforts to boost housing market
https://www.globaltimes.cn/page/202405/1313258.shtml
Does China need its own theory of economics? Some academics call for a new model
China committed to building high-level socialist market economy, laying foundation for high-quality devt
https://www.globaltimes.cn/page/202406/1313759.shtml
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Praise for The China Trilogy:
Why and How China works: With a Mirror to Our Own History
JEFF J. BROWN, Editor, China Rising, and Senior Editor & China Correspondent, Dispatch from Beijing, The Greanville Post
Jeff J. Brown is a geopolitical analyst, journalist, lecturer and the author of The China Trilogy. It consists of 44 Days Backpacking in China – The Middle Kingdom in the 21st Century, with the United States, Europe and the Fate of the World in Its Looking Glass (2013); Punto Press released China Rising – Capitalist Roads, Socialist Destinations (2016); and BIG Red Book on China (2020). As well, he published a textbook, Doctor WriteRead’s Treasure Trove to Great English (2015). Jeff is a Senior Editor & China Correspondent for The Greanville Post, where he keeps a column, Dispatch from Beijing and is a Global Opinion Leader at 21st Century. He also writes a column for The Saker, called the Moscow-Beijing Express. Jeff writes, interviews and podcasts on his own program, China Rising Radio Sinoland, which is also available on YouTube, Stitcher Radio, iTunes, Ivoox and RUvid. Guests have included Ramsey Clark, James Bradley, Moti Nissani, Godfree Roberts, Hiroyuki Hamada, The Saker and many others. [/su_spoiler]
Jeff can be reached at China Rising, je**@br***********.com, Facebook, Twitter, Wechat (+86-19806711824/Mr_Professor_Brown, and Line/Signal/Telegram/Whatsapp: +33-612458821.
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