World News
A community for discussing events around the World
Rules:
-
Rule 1: posts have the following requirements:
- Post news articles only
- Video links are NOT articles and will be removed.
- Title must match the article headline
- Not United States Internal News
- Recent (Past 30 Days)
- Screenshots/links to other social media sites (Twitter/X/Facebook/Youtube/reddit, etc.) are explicitly forbidden, as are link shorteners.
-
Rule 2: Do not copy the entire article into your post. The key points in 1-2 paragraphs is allowed (even encouraged!), but large segments of articles posted in the body will result in the post being removed. If you have to stop and think "Is this fair use?", it probably isn't. Archive links, especially the ones created on link submission, are absolutely allowed but those that avoid paywalls are not.
-
Rule 3: Opinions articles, or Articles based on misinformation/propaganda may be removed. Sources that have a Low or Very Low factual reporting rating or MBFC Credibility Rating may be removed.
-
Rule 4: Posts or comments that are homophobic, transphobic, racist, sexist, anti-religious, or ableist will be removed. “Ironic” prejudice is just prejudiced.
-
Posts and comments must abide by the lemmy.world terms of service UPDATED AS OF 10/19
-
Rule 5: Keep it civil. It's OK to say the subject of an article is behaving like a (pejorative, pejorative). It's NOT OK to say another USER is (pejorative). Strong language is fine, just not directed at other members. Engage in good-faith and with respect! This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban.
Similarly, if you see posts along these lines, do not engage. Report them, block them, and live a happier life than they do. We see too many slapfights that boil down to "Mom! He's bugging me!" and "I'm not touching you!" Going forward, slapfights will result in removed comments and temp bans to cool off.
-
Rule 6: Memes, spam, other low effort posting, reposts, misinformation, advocating violence, off-topic, trolling, offensive, regarding the moderators or meta in content may be removed at any time.
-
Rule 7: We didn't USED to need a rule about how many posts one could make in a day, then someone posted NINETEEN articles in a single day. Not comments, FULL ARTICLES. If you're posting more than say, 10 or so, consider going outside and touching grass. We reserve the right to limit over-posting so a single user does not dominate the front page.
We ask that the users report any comment or post that violate the rules, to use critical thinking when reading, posting or commenting. Users that post off-topic spam, advocate violence, have multiple comments or posts removed, weaponize reports or violate the code of conduct will be banned.
All posts and comments will be reviewed on a case-by-case basis. This means that some content that violates the rules may be allowed, while other content that does not violate the rules may be removed. The moderators retain the right to remove any content and ban users.
Lemmy World Partners
News [email protected]
Politics [email protected]
World Politics [email protected]
Recommendations
For Firefox users, there is media bias / propaganda / fact check plugin.
https://addons.mozilla.org/en-US/firefox/addon/media-bias-fact-check/
- Consider including the article’s mediabiasfactcheck.com/ link
view the rest of the comments
Ehhh, you would think that. However, China currently has more housing than people. I think at the moment the excess housing in the country could home an extra 150m people.
You can knock them for ignoring basic fundamental economic ideas like supply and demand, but it's not like they have a large homeless population being unsheltered.
This is, again, just a plainly incorrect take. Basically everyone in China is housed, yes, but a vast proportion of them still live in rural villages. The rural-to-urban transition does need to be planned for, and it's been a huge factor in China's real estate market. China's urbanization rate today is 66%, compared to 75% in Russia and 83% in the US.
I don't really see how your rebuttal conflicts with what I said? Unless you are claiming that developers were building housing for an eventual urbanization project that's going to migrate 150m people to cities within the next year or two......
These are still real estate companies we're talking about. They aren't wanting to be left holding the bag for years while their investment properties dry rot from prolonged vacancies.
Urbanization is expected to hit 75% by 2030... This is analysis corroborated by Morgan Stanley and others, so, unironically, yes.
That's still a bit of a long time for developers to have their money wrapped up in empty apartment complexes. Large buildings like that can start having major issues after months of vacancies, let alone years.
I think it's still more likely that developers'production exceeded immediate demand than it is for them to have planned for them to be vacant for years.
Either way, it's still not an economically sound idea. I think if they had planned for this, it wouldn't have hit the real estate market as hard as it has.
Basically, government officials knew that at some point they needed to aggressively overbuild real estate capacity in order to meet the urbanization demands. I think they predicted an incorrect curve: whereas they perhaps anticipated that urbanization would follow a trend more like Korea (74% at a similar stage in their urbanization trajectory), instead China is following a curve similar to Taiwan (~66%). A mistake in policy, yes, but it has localized effects.
Plus, I think you're missing a far more essential point: China doesn't give a fuck if every real estate developer goes bankrupt. That's just a cost of doing business. Instead, China's just swooping in and buying up distressed assets to turn into public housing. Homeowners aren't left holding the bag: developers are.
Just because they operate a mixed economy doesn't mean they can ignore material realities. Investments going unrealized arguably have more negative outcomes for more socialized markets.
You can't wring blood from a stone. Its not like it's just the developers cash being used to build the housing, there are subsidies and investments from banks, which are owned by the government. So if a project goes under, the best case scenario is that they buy it back to get some return on investment, but that's still robbing peter to pay peter. It's just not sustainable, especially if you aren't making wind on your other plans like urbanization.
China has seen the hottest real estate market it's ever seen. How many subsidies were banks handing out?
It kinda depends on what you consider to be a subsidy, but China has made significant investments into the housing sector to achieve "the hottest real estate market it's ever seen".
The biggest of these are in their policy surrounding land management. This allows corporations to skip through some of the most expensive and time consuming aspects of land development. I actually think this is extremely beneficial if utilized correctly, and we in the west should learn to implement it to some degree.
However, if it's utilized to build way more housing than necessary, then the land development policy isn't making any returns for their investment. The significant amount of resources, land, and political capital could have been utilized for something they actually need.
The second big one is subsidizing low income housing programs. Yes, they are turning some of this excess housing to more affordable living spaces. However they are doing this by having local governments purchase them with money borrowed from the central bank. It is just robbing Peter to pay Paul, and does not mean the central bank made any return on the money they originally lent to developers.
Which returns us to the largest problem with the market, the central bank lent out too much money to developers, whom utilized that to build an excessive amount of housing. Banks are supposed to evaluate things like roi and supply and demand to make sure borrowers aren't over leveraged to the point where they cannot realize a return on investment. However, if that risk assessment conflicts with set policy in a planned economy, then there's a risk that banks will forgo the vetting process to appease policy makers.
Land management. In the same way that changing zoning is not a subsidy, changing land management rules is not a subsidy. It's government support, agreed, but to call it a subsidy...?
Subsidizing low income housing. This has been a new policy used to seize distressed assets and make sure they don't sit... Well, distressed. The central bank is an arm of the government, and the government is achieving it's goals of housing access. At the end of the day, your claims on profit detract from the actual benefits of public housing.
By your arguments, public transit is robbing Peter to pay nobody, because the government sure as hell doesn't recover operating costs from fares. That's never been the point of public infrastructure.
I think I prefaced the statement with it depended on what you consider a subsidy. I admit it isn't semantic, but I really consider any government assistance to private equity a subsidy. Mainly because it in truth and investment in which the government is hoping for a return.
Right, but this is a reclamation action. It's not what the original investment was meant for, and surely they aren't getting the same monetary return they originally hoped for.
I support governments subsidizing affordable housing, this is another thing I think western states need to realize. However, it doesn't seem like they needed to focus on that much housing at the moment, and it doesn't seem like that was their original intention.
I think the government's entire existence should evolve around fulfilling their public's needs, including adequate public transportation. The key word there is need. The Chinese government didn't need to throw billions of dollars to private equity to build more homes than necessary. They did it because they wanted to maintain their gdp, so they could flaunt their economic vanity alongside the US on the international stage.
Fair enough. I think then it's important to distinguish between what subsidies are worth tariffing and what subsidies are not. If Germany rezones an area to allow car factories to be built, is that a subsidy worth tariffing?
I mean, in this case it's more that the developers lost money and the government gained assets sold below book value... That's pretty good return imo. The developers' investors got fucked, yes, but have you looked at, say, Evergrande's ownership? Not all Chinese developers are state-owned. In fact, the distressed ones are not.
Except... Do you know how China imputes rent for their GDP calculations? It's the construction cost depreciated linearly over the life of the building. Think about that for a second, then come back to me. I can explain it to you, but when I realized what it meant it shook me to the core so maybe it'll have the same effect on you lol. For reference, the US imputes rent by asking "what would the homeowner have paid if they had to rent."
Eh, I don't really have a strong opinion on tariffing. Tbh I don't really have strong opinions about subsidizing private equity, other than they really shouldn't really exist.
Under "free market" capitalism subsidies nor tariffs should exist by definition. And under socialism or communism, I would much prefer that the state employ the workers to do the work of the state. Subsidizing private equity just moves the people's money into the pockets of middle men.
I think the current global regression back to an odd stage of mercantilism is the product of the moneyed class in China and the west attempting to goad political leaders into abandoning their economic principles for greater profit margins.
Right, but the developers are way over leveraged meaning that it's not really their money but the banks. The banks/government is making the best out of a bad situation, but they are still loosing substantial amounts of capital. One of the reasons this kicked off in the first place was the government trying to get a handle on private equity borrowing more than their company is worth. That's not really not criticism on the government action, it's best to pull that bandaid off as soon as possible, but it still hurts. I think it's mainly the fault of local banks who have probably been either careless or fraudulent in their reporting to the central bank.
Again, this just isn't something I really care about much. GDP and how it's calculated is mostly legal fiction, utilized primarily for international bragging rights and as a way to lull investments from foreign capital.
It sounds like China utilizes user cost approach, and the west utilizes the comparison approach. China's approach makes sense for a more centralized lending apparatus, as it can help prevent the boom and bust cycle so common in western real estate market. But it's still susceptible to market collapse if you miscalculated building cost or depreciation values, and makes it harder to sustain value in real estate investments unless you are constantly building more and more.
I think in the end it just creates two different types of problems. In the west the comparison approach provides less motivation for developers to build an adequate amount of housing. In China, it creates too much incentive for developers to overdevelop housing to the point where it devalues the very concept of individual investments in housing.
I think a better solution would be to consider affordable housing development to be a natural monopoly that is provided by the government without the input of private capital. But that would be a blow to GDP for both systems, and I think we both know how the capital class of both China and the west would respond to that.