The ADVChina video posted above details the same thing. It’s well worth watching. A great series.
Chinese wages higher than Brazil & Mexico
Indeed. A decade ago, China was the place to go for low cost manual assembly. There was a wave of anti-automation, products that were made on highly automated assembly lines in the west were being replaced by products built built using much less sophisticated manual assembly. This allowed products to be brought to market much more quickly because it wasn’t necessary to go through the slow and costly process of building automated production lines, it also allowed production volumes to be scaled up or down very quickly.
With increased labour costs now, the one thing it doesn’t offer is inertia, it’s possible to start up operations in lower cost locations without the traditional worries of having to transfer large amounts of capital equipment. With complex automated assembly lines, you’d typically have to build up inventory, shut down and decommission the line in its existing location, ship it to the new location, install and recommission it and then begin the process of ramping it up to the previously attained throughput and yield, it was a big risk.
Local governments in China are fighting to retain employment, some foreign companies are being offered significant cash incentives related to production volumes to keep existing operations in China. It’s hard to see this strategy working out well.
I can see this. Leaves the developer free to wait for a demand spike, then quickly produce accommodation to current standards, rather than investing the money to finish them upfront and then being potentially left with outdated accommodation. Would only make sense where demand is currently being met, but is expected to exceed supply at some stage. Which probably isn’t that unrealistic for the likes of Shanghai. It seems a bit like selling options on building an apartment block.
As coles has said it’s in the video.
The flipper leaves it as a shell so the future buyer doesn’t have to spend money striping it back
Indeed some buyers prefer an empty shell as its common to redecorate on purchase of an apartment.
China’s big cities have become very developed now its an incredible thing to see how they have invested in themsevles. They are also continuing to invest very heavily in precision machinery , biooharma and medical research to name just a few areas…
Mostly pushing to locate high end R&D and engineering in China now, they are on the right track.
Here’s What We Now Know About China’s Capital Outflow Controls - -> fortune.com/2016/12/01/china-cap … -controls/
China net 2016 outflows at record $725 billion: IIF --> reuters.com/article/us-emerg … SKBN15H1FL
About the EB-5 Visa Classification - -> uscis.gov/working-united-st … sification
China’s ‘Smurfs’ Beat Cash Controls, Sending Real Estate Soaring - -> bloomberg.com/news/articles … te-soaring
Bank of China applies to set up Irish branch - -> thejournal.ie/bank-of-china- … 8-Mar2017/
Hong Kong family backs Central Bank building buy - -> irishtimes.com/business/comm … -1.2939950
Kushner got $50M in EB-5 funding for Trump Bay Street - -> therealdeal.com/2016/03/07/kush … ay-street/
Letter From Senators Regarding EB-5 Visa Program - -> nysenate.gov/newsroom/artic … sa-program
China: First capital inflows in 34 months – Standard Chartered - -> fxstreet.com/news/china-fir … 1703200610
China’s Capital Controls Trigger a Backlash After Scrapped Deals - -> bloomberg.com/news/articles … s-thwarted
China invests $124bn in Belt and Road global trade project
Reporter mentions that there is already overcapacity. If that’s true then what’s it all about? (government stimulus perhaps )
Building a Chinese empire and also providing jobs to their workers
It was massive investment in transportation infrastructure that got the British empire to where it was at the start of the 20tn century, so, yes history is rhyming.
China has a very good chance of having a global empire within 50 years as they will have a majority stake in many “third world countries”, they already have made major inroads into many African & Latin American countries to this end.
I didn’t see that in the link but I believe the quickest freight journey took 18 days in January this year and involved a lot of container switching between different gauge rails. I imagine the new project would mean a single gauge, single engined train that would significantly reduce transit time and make passenger transport a real option too.
But will they have a different outcome to Britain/France?
The Chinese could easily end up having so much influence that they effectively end up running a country (Like Britain did in India).
Depends on what country is going to be next on the empire trail, the US had been clearly the leaders since the middle of the 20th century and China is gradually taking their place.
I reckon Australia is a prime candidate for Chinese Dominion status.
Who is lending these vast sums to the Chinese? If the arse drops out of China is it not these lenders that’ll have the problems and not China. I can’t see the Communist Party bending over backwards to prop up foreign lenders.
It’s just funny money! FIAT currency expansión.
They have seemingly US$3trillion of foreign reserves if you can believe that
en.wikipedia.org/wiki/List_of_c … e_reserves
USA has US$120billion in 23 position, just below Algeria
Ireland in 102nd just above Albania
The issue is if it starts unravelling it can get out of control but then again China is unique in governance, control is something the government has in excess.
A reasonable ammount of the foreign investment is private citizens, especially in Australia, Canada, and some European countries but the numbers are staggering.
I don’t doubt that China could take us all into a brutal global recession but I don’t feel it will happen given the way the game is rigged.