What Happened To China During The Gfc

What will happen if China loses the trade war with the USA?

King Donald will hold the title of Cesar of World Trade for the next 5 years, presumably until the next Trade Olympiad.48% of US citizens will designate a national holiday on the day the trade war was won.48% of Americans will regard the event as the day America is Great AgainTrump will be Potus until 2025 Jan 25.The rest of the would not have notice anything different. Whilst some historians would put a footnote in their comparison to the rise and fall of empires of world history, marking it as the turning point of yet another baton passing between one incumbent to the next.During the same period, a far more important event took place, as will be recorded in world history- Climate condition of earth took marked a significant change for the worse as weak economy worldwide caused a pullback from spendings on less polluting energy in favour of cheaper sources in both America and emerging economies.A caveat: all above happens if and only if USA wins the Trade War of the century. Else, all the above optimistic outcomes is off the table. Instead the world recorded that the Significant Event of World occurred for the 3rd time. (Hell has no fury like a Trumphant scorned).Either outcome, we certainly live in interesting times. time and tide waits for no man; so even these will come to past.

When will real estate prices in China fall?

Significant fall in price will not occur in the near future.First allow me to give an illustration:In Economics 101 we learned that when an economy is doing great, its fiscal policy should be tightened up (i.e. raising the interest) to put the break on an overheating boom cycle. A higher interest rate also serves to be a fiscal vault that can be cashed out in a contracting economy later down the track.China has done something similar in the housing sector. Starting in the late 2000s, there have been increasingly more restrictive measures put in place to curb property investments. During the first round of tightening, the down-payment requirement was raised for the second house and the third house needs to be paid by cash in full. A year down the track, when the property prices are still rising too quickly, the government banned purchasing additional homes for existing owners all together. Now the third round of tightening is about to kick-in: back-taxing of all existing owners of two or more properties in the hope that some are willing to sell-off their holdings.As you can see the policy makers are still trying very hard to curb property prices and the effectiveness has just started to become visible in terms of year-on-year price movements. In this regard China is unique amongst major economies to have such control in market movement and when things hit the fan there will be ample room for policy makers to boost the market by relaxing such rules.Let's have a look at how resiliant is the Chinese property market compare to 'Murica during the GFC:The U.S.A:China:Quite a difference between the two, no?Therefore I wouldn’t hold my breath to wait for a Japanese style property bust anytime soon.Although the prices in Mainland China is rising ever slower, this is becoming a headache for policy makers in Hongkong, Singapore, the U.S. and Australia as cashed-up Chinese buyers have nowhere else to spend their money.Yes, your local housing affordability problem is now Made in China.

Why wasn’t the Chinese economy affected much by the last global financial crisis?

China’s fiscal stimulus response to the global Great Recession 2008–2009 and the continuing ongoing fiscal stimulus since then to accelerate growth and invested in infrastructure. The latest offshoot of this growth initiative is called “One Belt, One Road,” and is the new Chinese Economic Global Order. Growth and Progress, but always China and Chinese jobs first. There is no lack of heavy equipment operators in central Africa, but if China is financing the project, Chinese manual workers are employed constructing the project in addition to those planning the project. Chinese jobs first, even if that means an assignment in Central Africa.Behind China’s $1 Trillion Plan to Shake Up the Economic OrderThe massive infrastructure projects, along with hundreds of others across Asia, Africa and Europe, form the backbone of China’s ambitious economic and geopolitical agenda. President Xi Jinping of China is literally and figuratively forging ties, creating new markets for the country’s construction companies and exporting its model of state-led development in a quest to create deep economic connections and strong diplomatic relationships.The initiative, called “One Belt, One Road,” looms on a scope and scale with little precedent in modern history, promising more than $1 trillion in infrastructure and spanning more than 60 countries. To celebrate China’s new global influence, Mr. Xi is gathering dozens of state leaders, including President Vladimir V. Putin of Russia, in Beijing on Sunday.It is global commerce on China’s terms.Modern global economic fiscal stimulus, yes the price tag has a few zer000,000,000,000s.Google Public Data Explorer:China’s growth with fiscal stimulus observes no global economic crisis or Great Recession. Fiscal stimulus grows and pays. Currently no other country has this kind of economic growth, and certainly no other country is lifting so many out of poverty into the world economy and economic progress. India was the only other country to also avoided the Great Recession but their growth is not even close to that of China.