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International Forum Discuss Property bubble burst is good news for China's economy: Andy Xie at the Political Forums; A different point of view I guess: Andy Xie, an outspoken independent Chinese economist, has predicted that the world will ...

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Old 04-29-2012, 02:09 PM
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Default Property bubble burst is good news for China's economy: Andy Xie

A different point of view I guess:

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Andy Xie, an outspoken independent Chinese economist, has predicted that the world will face three major crises next year. The economist said the debt crisis in Europe will become an increasingly politicized issue, the American economy will face tough challenges from the uneven distribution of wealth while China's property market will experience huge adjustments. Xie was speaking at a forum entitled "China and the World" organized by the Beijing-based Caixin Media group.

"China's property bubbles have burst," Xie said, predicting that a wave of closures will sweep through the country's real estate sector and that the readjustment of the property market will restructure China's economy. "The burst is great news for China's economy in the long term," Xie said, saying the property sector might prove to have been the origin of a number of problems in the country's economy.

China's manufacturers often look for properties as alternative financing sources and use their businesses to borrow money and then buy properties. Some steelmakers even sold their products at a price lower than cost because they made a deal with property developers and used their businesses to repeatedly borrow money from banks.

The economist urged the Chinese government to allow these opportunists to fail, saying that they have adopted this business pattern because they know they would be rescued if they "kidnapped the government and banks." The pattern must be broken, Xie said, adding that the Chinese economy has a bright future ahead if the government can bear the brunt of the property market adjustment over the next six months.
Property bubble burst is good news for China's economy: Andy Xie?Economy?News?WantChinaTimes.com
Responding to a member of the audience who suggested that not all such businesses should be left to close, that some should be treated differently and receive government assistance, Xie replied by saying the government should protect investors instead of people who took advantage of rising property and land prices. National policy should not be influenced by individuals, he said.

Xie predicted that the first half of next year will present one of the most difficult periods for the world's economy as Europe's economic growth could come to a halt. He said the present economic recovery is an illusion as governments around the world have tried to plug the hole by borrowing more money, a move considered unsustainable for financial markets. This economic crisis will wreak political havoc, Xie predicted.

The controversial economist also shared his insights on the US economy. Unequal distribution of wealth is the main cause of US economic crisis, Xie said. Lawyers, doctors and bankers have been among those that benefit most from the country's system and the US economy will not start to grow before a new political power challenges and changes this system, he said.
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Old 04-30-2012, 09:46 AM
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Default Re: Property bubble burst is good news for China's economy: Andy Xie

Interesting. A Chinese minister agreeing with me about the unequal distribution of wealth in this country. Same subject I just finished posting in the "richest one percent" thread. I've been just questioning mind you, not saying I have all the answers.

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A different point of view I guess:
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Old 04-30-2012, 09:48 AM
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Default Re: Property bubble burst is good news for China's economy: Andy Xie

I mean Chinese economist, not minister.
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