adelaide auction clearance 15%, page-5

Wealthcrea8or, how sure are you that the China economy is about manufacture and not property speculation?

It was about manufacture, but I thought after the GFC, demand for goods fell around the world, so China's state governments started stimulus via SOEs (State Owned Enterprise) into property construction/speculation. To quote Jim Chanos, China is now ?on a treadmill to hell because 50% to 60% of GDP is construction." Its at levels never see before, even for a developing economy.

A Royal Bank of Scotland report says "Since the beginning of 2009 until now, total loans at Chinese banks grew by 65%. In other words, close to 40% of their total loans were lent out in the past two and a half years, especially in 2009 when the world was in a financial crisis. China?s financial system is highly leveraged with the ratio of bank loans to GDP already hitting 120%, higher than the peak level of Japan during its financial bubble"

The SOEs and LGFV's (Special Purpose Vehicles) are now so heavily geared, the central government is having to bail them out.

China consumes 60% of world iron ore and 52% of coking coal in order to build empty apartments, office towers etc to keep it's GDP growing.

I suspect when it pops, Australia will see contracting household demand from our Housing Bubble coupled with contracting exports from the mining boom.