[csomar]

The chinese stock market (Shanghai index) has been through lots of boom and busts. It didn't affect western market in the slightest. I'd not expect otherwise. The only difference is that if the Chinese economy tanks hard (great depression style), this might be contagious to the rest of Asia and eventually to the rest of the world.

But any guess is good if that happens.

[irjustin]

Agreed a crash in China would have fallout but not 08/09. The Chinese housing market was fueled by the familial need to own a house. Which led people to lead no matter what people would buy property, basically "stocks always go up"... "housing always goes up"...

We can never run out of buyers!

[_hypx]

The closest analogy might be the Asian financial crisis of 1997-98.

[CamperBob2]

If the comment above regarding a fertility rate of 1.09 is correct, then yes, you can run out of buyers, and are well on the way to doing so.

[irjustin]

mmm you would need a fertility rate of like 20x something like 20 yrs ago to keep up.

you can saturate a market with houses way faster than pop out kids even at a modest growth 2.5x birth rate.

a bunch of middle class families had 3 or even 5 properties all with mortgages and so many of them weren't even built yet. who needs sustainability.

[Scoundreller]

And like, zero immigration. A net emigrant country.

[rasz]

1 You cant buy buy property in China.

2 Most of the building boom was tofu dreg. We are talking from stuffing literal garbage from landfills into walls/foundations to using rebar that crumbles in your hand ending up with brand new buildings collapsing. Classic https://www.reuters.com/article/us-china-building-idUSTRE55Q...

[worrycue]

> The Chinese housing market was fueled by the familial need to own a house.

And as a store of value I believe since they have nowhere else to invest their savings.

[vxNsr]

isn't the chinese market even more messed up because people are buying houses that don't exist yet, at least in 08/09 there was something, the asset itself, while overvalued did at least have some value, in china a lot of people just own and are paying a mortgage on a future promise.

[irjustin]

This is semi-common practice and obviously when "done correctly" can work out.

An over simplification of Evergrande's issue two key issues are 1. Housing always goes up, but that alone is just a thought it needs an action. The action is 2. they used the sales of an unbuilt, future property to fund an existing, active project.

Again, a relatively common practice, but this is a form of leverage. It allows insane growth because you can start projects way before than you would normally. Of course they were levered up so hard that once the housing market cooled they couldn't sell future projects which then could not fund current ones etc etc.

While it sounds like a ponzi scheme, it's not since "if all the projects" completed then everyone who bought a house would have a house and all peoples would be happy.