China's Crisis?

"They are really feeling the effect of the financial crisis."

Chinese manufacturers once snapped up its luxury apartments, but with profits falling as a result of the global downturn many owners need to offload properties urgently and raise cash to repay business loans, estate agents said.

Now apartments on Phoenix Island which reached the dizzying heights of 150,000 yuan per square metre ($2,200 per square foot) in 2010 are on offer for just 70,000 yuan, said Sun Zhe, a local estate agent.

"I just got a call from a businessman desperate to sell," Sun told AFP, brandishing his mobile phone as he whizzed over a bridge to the futuristic development on a electric golf cart.

"Whether it's toys or clothes, the export market is bad… property owners need capital quickly, and want to sell their apartments right away," he said. "They are really feeling the effect of the financial crisis."

via Chinese Dubai turns into deserted island – FRANCE 24.

China is getting hit by falling exports (despite claims to the contrary; we're told that the falling number of shipping containers don't lie), some of the worst air and other pollution on the planet (probably much worse than generally reported), fierce international competition in the form of lower-paid labor in other countries, very bad accounting standards, obvious corruption in high places, a restless population that will turn on a dime in riots, and a government that really doesn't know what its ideology is.

See also: China’s riskiest property market just collapsed. Is this how it starts?

Not everyone is as cautious about China though. Dan Steinbock sees two shifts taking place that don't seem to alarm him: 1) direct foreign investment in China is moving west in China and is reinvesting earnings from China in China 2) money is shifting from manufacturing to services to take advantage of China's growing middle and upper classes' demand for such services. See: Foreign Investment Relocates in China and Asia.

Top that off with this from Reuters: Exclusive: China plans bond overhaul to fund $6 trillion urbanization – sources. Can they pull it all off? Are you interested in betting your money on that they will? Can you afford to lose it if they fail even partially? Are there better places to invest?

Why? How can it not crash?


If you are an investor in 1-4 unit properties in Arizona, California, Nevada, Oregon, Utah, or Washington, please do the financially responsible thing and make sure you have proper Landlord Insurance with PropertyPak™. We love focusing on real estate and the economy in general, but we are also here to serve your insurance needs.

Hill & Usher (PropertyPak™ is a division) has many insurance offerings. See our menu above for more info and links.

Did this post help you? Let us know by leaving your comment below.

Note: This blog does not provide legal, financial, or accounting advice. Seek professional counsel.

Furthermore, we, as insurance producers, are prohibited by law from disparaging the insurance industry, carriers, other producers, etc. With that in mind, we provide links without staking out positions that violate the law. We provide them solely from a public-policy standpoint wherein we encourage our industry to be sure our profits, etc., are fair and balanced.

We do not necessarily fact checked the contents of every linked article or page, etc.

If we were to conclude any part or parts of our industry are in violation of fundamental fairness and the legal standards of a state or states, we'd address the issue through proper, legal channels. We trust you understand.

The laws that tie our tongues, so to speak, are designed to keep the public from losing confidence in the industry and the regulatory system overseeing it. Insurance commissioners around the country work very hard to analyze rates and to not allow the industry to be damaged by bad rate-settings and changes in coverages. The proper way for people in the industry to deal with such matters is by adhering to the laws, rules, and regulations of the applicable states and within industry associations where such matters may be discussed in private without giving the industry unnecessary black eyes. Ethics is very high on the list in the insurance industry, and we don't want to lose the people's trust. That said, the industry is not perfect; but what industry is?

For our part, we believe in strong regulations and strong regulators.

We welcome your comments and ask you to keep in mind that we cannot and will not reply in any way or ways where any insurance commissioner could rightly say we've violated the law of the given state.

We are allowed to share rating-bureau data/reports and industry-consultant opinions but make clear here that those opinions are theirs and do not necessarily reflect our position.

Subscribe