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China/Asia Economic Implosion On The Horizon? – Part V

By Kurt Osterberg · On April 4, 2018

So far, we have covered the history of Chinese property and equity market growth from before the 2008-2010 global credit crisis till now and have clearly shown that the Chinese property market is rolling over (downward) after the 2016 regulations were put into place to curtail the mass exodus of capital from within China. We have also gone over many of the correlative economic items that point to the fact that a 15~25% correction in any one market segment, property, equity, credit/debt or global markets that result in capital risks for China, could drive a contagion effect for the Chinese investors/government. In other words, a simple 10~20% price decline in two or more of these markets could put enough pressure on the Chinese that capital reserves could diminish dramatically as well as some level of investor panic could set in to drive a “death spiral” type of event.

Even today, our researchers visited the National Bureau of Statistics in China to continue our research and found the following :

Whereas growth rate of purchases (land), commercial sales and floor space sales and growth rate of fund for development have decreased dramatically just over the past 3+ months. When you look at this data on a year over year context, it shows mild contraction up until December 2017.After December 2017, the contraction in Residential and Commercial real estate activity is dramatic – almost frightening.

Throughout all of 2017, the Growth Rate of Investment in Real Estate Development averaged near 8.1%. Beginning in early 2018, this level shot up to 9.9% – the highest level in over 13 months.

Growth of Land Area Purchased over the same period showed signs of increase over 2017 – averaging near 11.2% or so throughout 2017. The values of this indicator near the end of 2017 were above 15%.. Whereas the 2018 levels show a -1.2% growth rate. In one month span, the level of this indicator fell -17%?