Shanghai expansion going insane

Discussion in 'Wall St. News' started by alientrader, Feb 26, 2008.

  1. Shanghai is in the process of building a super Greater Shanghai connecting cities within 300KM radius. The Greater Shanghai will be 34 times bigger than current and 8 times more populated.

    The new super city will be the largest city in the world comprising 130M people -- a little more populated than Japan and half that of USA. S

    Satellite cities within the Greater Shanghai areas will be connected by magnetic highspeed train and highways, as well as undersea tunnel linking Pudong and the outskirt islands to facilitate 25-min car ride from end to end.
  2. And don't forget...
    Americans and Europeans will all unite throughout the world to buy more bra-hooks than ever to finance this fantasy of growth.
  3. Gargantuan-sized building projects tend to be announced at long-term market tops. This should be no different.
  4. I can hear the distant rumble of a crash...
  5. if a traders farts in new york, does it create a economic crash in asia?
  6. Only if he was long natural gas.

    Or if a trader farts in NY and nobody heard him fart or smelled the offending gas, then... you know the rest...
  7. I think there will not be a crash in the china markets, at least not any time soon. Here's why

    1) the entire market is controlled by government, who has absolute power to make policy changes if it feels inflation or bubble is forming. It did (successfully) to the real estate bubble in shanghai after the prices went up i believe 1000+% in a few years, now prices dropped some but nothing dramatic and is in a sideway market as expected. It is doing it to stocks now to stabilize it after the last 2 years of record growth.

    2) Most chinese do not have debt and have high ratio of cash reserve in relation to their life style cost. Having a credit card debt to buy a tv or even a car is almost unheard of in china. The only debt in china for the middle class average joe is maybe a stable mortgage, even that is not a large percentage, most real estate transactions are still done with cash...literally you bring bags of cash in exchange for the house deed, then put that into the bank.

    3) The upper and middle class is growing rapdily in china, which means an increased demand for most the luxury and/or export items china currently produces for foreign markets, this means if a recession does happen in a foreign market like the us, china's domestic buying power will replace the foreign demand for many of those items.

    Car is a perfect example, toyota / honda etc that are manufactured in china are completely sold out with a wait time of months for delivery after purchase.

    I am bullish in china, think the next big thing will be commodities as the demand skyrocket and supply shrinks.

  8. If they allowed foreigners to trade their markets and had an open exchange rate I'd be in Shanghai tomorrow.
  9. Heh they did that to real estate, then after it keeps doubling, they shifted policy again to ban foreign investments in real estate going forward unless you have perm residency or something ridculus...
  10. newguy,

    The real questions for China will be:

    - how exposed is it to a fall off in the US/Europe?

    - is it linear or is their a multiplier?

    - do we get a fall of in US/Europe.

    I think the answers are:
    - very, its an export economy
    - multiplier (there is no real cushion and totalitarian govts can only do so much before the peasants starve)
    - it still seems too early for me, I would have picked the recession to follow the election not precede it.
    #10     Feb 27, 2008