China facing same financial crisis as the US

by DrSchool Wed Mar 20, 2013 2:26 am

http://blogs.wsj.com/chinarealtime/2013/03/18/economists-china-mirrors-u-s-on-eve-of-financial-crisis/?utm_source=Sinocism+Newsletter&utm_campaign=f647d4a643-Sinocism03_19_13&utm_medium=email

I've known for a while that the housing and real estate bubble was going to burst in China. If their healthcare system were as expensive as America's, China would already be in a major crisis.

by Ben Reilly Wed Mar 20, 2013 4:31 pm

I tend to think it won't be quite as bad for China, for one major reason. Though the source did say a Chinese real estate crash could affect the banks, I don't think it would hurt their banks as much as it did the U.S. banks because of the goofy investment products U.S. real estate was tied up in.

Essentially our banks were heavily invested in financial products (those "toxic mortgage bundles") that were incredibly vulnerable to even a slight economic downturn. If risk-taking had been regulated down to sane levels in the U.S. financial markets, I believe 2008 would have been far less devastating.

by veya_victaous Wed Mar 20, 2013 11:01 pm

Agree with Ben,
Another thing, more of the Housing in China is investment and it is the investors not the working poor that will suffer the brunt of it. A lot of the housing is in New cities that have never been lived in so there isn't the same loss as the US town that used to a vibrant economic hub.

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China facing same financial crisis as the US

China facing same financial crisis as the US

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Re: China facing same financial crisis as the US