Tag: China

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Current Events

China’s Collapsing Real Estate Market – Part II

China
China's Real Estate Crisis

Behind the glittering modern skyline of many of China’s cities lies an ugly truth that the communist party does not want to deal with:  the country’s miraculous economic growth was due primarily to its speculative real estate market.  In particular, the China Evergrande real estate fiasco is shaping up to be the equivalent of what happened to the United States in 2008, except China’s fate will be worse.  For years the China Evergrande real estate company has been engaged in a Ponzi (pyramid-like) scheme:  homes were sold in advance to the public, and then those funds were used to finance new housing projects.  The only problem was:  most of the current projects were never completed.  To make matter worse, people were required to start making mortgage payments to the banks as soon as the property had been purchased.  Huge numbers of people were buying real estate:  at least 75% of China’s household wealth is tied up in its housing market.  No doubt China Evergrande was allowed to run a Ponzi scheme without any oversight from government officials, as its CEO, Xu Jiayin, was well connected to the communist party.

Home buyers are furious with their politicians who have done little to solve the problem.  More buyers are now refusing to make their mortgage payments, which has placed many Chinese banks in financial jeopardy. China Evergrande owes money to over 170 domestic banks and to over 120 financial institutions. Home buyers are taking to the streets protesting this injustice, only to be met by police who arrest them.  Home prices in many of China’s cities has declined by over 20% and more decreases are being forecasted.  Throughout China there are millions of unfinished and vacant apartments and buildings, so many that they have created “ghost cities.”  Property developers do not have the money to complete housing projects, people are withdrawing their savings from the banks, the banks are running out of funds and in turn freezing everyone’s deposits.  It is a nightmare scenario that has no solution in sight. 

China’s youth have become known as “Bai Lan” youth (meaning “let it rot”).  More and more of them are disillusioned with the corrupt communist party and the status quo.  Western politicians and businesses need to realize that China’s success is more image than substance.  With the economy rapidly deteriorating, investing in China is now a huge risk. 

Categories
Current Events

China’s Collapsing Real Estate Market – Part I

China - Real Estate Market - Shanghai
China's Collapsing Real Estate Market

For years, China’s communist government has bombarded the western world with images of China’s incredible economic wealth.  Thanks to the supposed good governance of the communist party, there was so much abundant wealth that most citizens could own their own homes, even two or three homes.  Everyone, particularly the Chinese people, were led to believe that China’s booming real estate industry would go on for many more years.

Unfortunately, China’s real estate bubble has now burst, and not even the authoritarian communist party can hide this economic disaster:  the China Evergrande Group, China’s second largest property development company has defaulted on its loan payments.  It has a debt that has now hit $300 billion USD, which is sending shock waves throughout China’s real estate market.  Hard to believe that this company’s stock values used to be the world’s most valuable, and now it is in default.  It has ignited a chain reaction pushing other companies, including banks, to the verge of collapse.

For decades China’s communist party has ignored the rampant speculation that engulfed the real estate industry and now this sector that accounts for 29% of China’s GDP threatens the entire economy.  So far, the government has offered no solution to solve the problem.  You may want to follow Warren Buffet’s example, and start selling off your Chinese investments.  China’s economic problems are only going to get worse.  Get out of the country while you still can!   

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Current Events

Another New Coronavirus: SADS-CoV (Worse than COVID-19)

A new strain of the coronavirus, even more deadlier than COVID-19, has emerged from China. The new strain is called “Swine Acute Diarrhea Syndrome Coronavirus” (SADS-CoV). While COVID-19 attacks the respiratory system, SADS-CoV attacks the gastrointestinal tract, causing uncontrollable diarrhea and other serious problems. Someone infected with it can easily die of starvation and dehydration, as you literally can’t keep any food in you. The only potential good news is that the drug, remdesivir, seems to be able to treat this new strain. Remember that if you or anyone you know gets it and lands up in the hospital, as this strain is deadly!

SADS-CoV has recently been found in pigs, which can easily transmit the virus to humans. According to Chinese authorities this human transmission has not happened. Unfortunately, given China’s cover up of SARS and COVID-19, their “track record” of honesty and openness has not been good. Who knows if this new virus has already been spread to humans and left China to start another pandemic. Only time will tell!

For more information, go to Mike Wehner’s article given below:

A new coronavirus that could be even more dangerous was just discovered in China
SADS-CoV
A new deadly strain of coronavirus
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World Politics

Canadians Given Death Penalty in China

Canadians Sentenced to Death in China – Update

In addition to the “Two Michaels” who were recently charged with espionage, two other Canadians are still under arrest in China:  Fan Wei (known simply as Mr. Fan), arrested in 2012, and Robert Lloyd Schellenberg, arrested in 2016.  Both cases are alleged to involve drug smuggling.  In 2019, Chinese officials formally pronounced the death sentence on both of these men. Robert Schellenberg has launched an appeal (which stands very little hope of success, according to legal experts), and no one knows what has happened to Mr. Fan.  Both the Canadian government and media have said very little about the fate of these two men.  Their death sentences will be by lethal injection or by firing squad.  

Canada’s Prime Minister, Justin Trudeau, prides himself on being a champion of Women’s Rights as well as Human Rights, yet has given the arrest of Canadian citizens very little attention.  In December 2018 when Sarah McIver, an ESL teacher from Alberta, was wrongly arrested for working illegally, he refused to even discuss her arrest with China’s President Xi. Out of 5 recent arrests, she is the only Canadian released from prison.  More than likely the other four Canadians will be killed by the Chinese authorities (two have already been sentenced to death). 

It is not surprising that Canada was not recently given a seat on the UN Security Council:  the international community felt that it didn’t deserve it. Instead of standing up for Human Rights, the Canadian government has tried to appease China’s communist government even if it means ignoring  the wrongful arrest and death sentence of Canadians. 

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World Politics

China: Canadians Charged with Spying

China
China

China: Two Canadians Charged with Espionage – Update

On June 19, 2020, Chinese authorities formally charged two Canadians, Michael Kovrig and Michael Spavor (known as the “Two Michaels”) with spying (espionage).  Both were arrested in China in December 2018.  Given Canada’s mediocre, if not non-existent, role in international affairs (e.g. it was beat out for a recent UN Security Council seat by Norway and Ireland), these charges are ridiculous.  Spying for Canada?  Really?  The Chinese authorities honestly expect us to believe that!

In effect, the Two Michaels are being held for ransom, as the Communist Chinese government wants Canada to release Meng Wanzhou, a top executive at the Chinese telecommunications company, Huawei.  She is being held in Vancouver, awaiting extradition to the USA for bank and wire fraud.  While the Two Michaels are being held in prison with no contact from the outside, Meng Wanzhou is being allowed to live in luxury at her $14 million (CDN) 7-bedroom mansion in the fashionable Shaughnessy district.

Recently several prominent American politicians (both Republican and Democrat) have joined together to speak out against their wrongful arrest and to fight for their release.  No such action has taken place in Canada.  The moral of the story may be:  if you are a Canadian and get arrested in China (or elsewhere), call the American Embassy, as they will actually try to help you!  

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Current Events

China Not Safe to Visit

On December 1, 2018 Meng Wanzhou, CFO, Huawei, was arrested in Vancouver, Canada on an extradition warrant issued by the US government for bank and wire fraud. In retaliation, on December 10th, China’s secret police arbitrarily arrested two Canadian businessmen: Michael Kovrig in Beijing and Michael Spavor in Dandong. They accused them of breaking China’s national security laws (which they both deny). To date there has been no trial. Canada’s Prime Minister, Justin Trudeau, is aware of this situation, but has taken no concrete action to obtain their release. By their actions, China’s communist government is warning all foreigners that they can be arrested at any time and for any reason. China is no longer safe to do business or to go for vacation.