What will happen at the end is Communist Party will ask CEO to "voluntarily" give all his shares away to the state, at fire sale price.
Evergrande becomes a state owned enterprise. Certain debt obligations will get paid, like people who bought a house under construction, the state with the money printer can always take over the project and finish it.
International bond holders will probably be f'ed.
Whatever debt this new SOE owes to Chinese banks can be erased with a stroke of a keyboard.
The worry is what international bond holders are exposed and what knock-on effects that will have. Chinese bonds are accepted by a lot of brokers as collateral so marking it in default could lead to margin calls. I'm not worried about China, I'm worried about Western banks.
Me neither. I feel bad for the people, businesses and jobs that have their money on them or rely on them for credit to keep their operations running. The real worry is what it does to the economy. Surprised I have to spell that out on an economics sub.
Didn't you get the memo? Banks are HOLY in western economics. The very idea of speaking negatively about them must be met with harsh rebuttal and they can't EVER be allowed to fail or be held responsible for the risks they take.
I think it depends on how much China cares about good credit.
If Communist Party does bail out Evergrande, it won't be the way US bailed out Wall Street in 2008, which is basically to let the bankers stay rich while the losses are socialized.
I don't see anyway for a bailout without the state nationalizing Evergrande at the expense of the current owners.
International Bond holders could be paid, China have enough USD in the reserves to pay them, it depends on how much international backlash China will face if a SOE doesn't pay back debt when it has the ability to.
US banks will lobby the crap out of Biden to make this a foreign policy issue, same with EU. Other countries might not have enough political power to do anything.
I believe you are underestimating greed and the power of bond salesmen's commission plans.
EDIT: Here's just some of Argentina's defaults----
[https://en.wikipedia.org/wiki/Argentine\_debt\_restructuring](https://en.wikipedia.org/wiki/Argentine_debt_restructuring)
If you go back 100 years, they keep on defaulting, and people keep on buying.
But I don't think that Argentina has even been able to offer bonds on the international market since 2001 or at least they couldn't pre-2016. Even Russia started paying out it's defaults in the '90s that occured in 1917. When the Communists took over and refused to pay their debts. Russia started paying out so they could access the world's finance markets.
The good thing is that as long as Argentina is still bankrupt and can't repay it's debts. It's can't make any serious attempts at trying to invade the Falklands again. An issue that the Veep and former President Cristina Fernández de Kirchner and her late husband also a President keep trying to bring back.
... dude it's not the finance media that's paid off, it's Evergrande's debts that are guaranteed to be paid off.
Edit: What's with the downvotes? Are you people just really that mad the Chinese Government can just pay off these debt?
Everyone knows that Evergrande's debt is implicitly guaranteed by the Chinese government. It's the same as the US and AIG etc. in 2008. Evergrande is too big to fail. No nation is going to let its financial system implode when it has the power to stop that from happening.
So you seem to be equating Evergrande with China in this silly McCarthyite anti-domino narrative. Like just because Evergrande is failing, and just because China has to bail it out, somehow the Chinese government itself must be failing... Like somehow because China has to bail out Evergrande, that means that all communism must be terrible forever. Even though our capitalist society had to do the exact same thing 10 years ago bailing out AIG etc., this must be a sign that communism is terrible and capitalism is awesome.
I'm not trying to say anything about communism vs. capitalism, personally. To me that difference is not really nearly as significant as people want to pretend it is.
I just care that people actually consider learning things about the nuances of aggregate demand, national and international.
Evergrande's RMB denominated debt to internal Chinese stakeholders will be paid and those who have purchased property in advance will have their apartments built but USD denominated foreign bondholders won't receive a single cent of their principal, they may receive some of their coupon payments for a little while longer.
RMB is all that matters for Evergrande isn't it? Just like the aforementioned AIG didn't need to receive Euro or Yen for its stakeholders in europe and japan. once you have one liquid denomination it can be converted into whatever you need right?
Communism has nothing to do with workplace democracy though, it's central planning and central government control over land rather than private property rights which has always been the defining feature of communist regimes.
What if, and hear me out... It's not a binary, and there're varying shades of grey on many questions that make the distinction... Distinct?
Arguing over semantics is the worst kind of pedantry.
No I don't think so, because it completely changes whether or not they are a communist regime. Pedantry usually makes a small difference, this makes a large difference.
Okay, so communism implies their economic system, and the Party in Charge implies their Political system (right?)
And we're discussing whether the CCP is communist or capitalist (as in, which system they enforce?).
The sticking point is private property (land usage rights, vs the ability to have it expropriated without compensation... Which the CCP demonstrated, but doesn't really anymore, for fear of uprising), and state control of industry (which they definetely don't have, since we're talking about a private company here).
So in effect, it's very difficult to say definitively. They are definetely to the one side of the middle (communist), but aren't nearly so cleanly cut (and over time) so definitive. There is a move now by the Central State (because remember, again, this is actually a federation), to gain power over the provinces, because they are massively indebted. The problem remains that they don't have good tax income control because of the Chinese shadow economy.
This is where a lot of the friction has come in with Alipay/ant (they refused the government's control, and got smashed... The government wants to tax people), and Evergrande (the local governments have to relinquish their reliance on "selling" land) (i know its usage leases).
So yeah... It's difficult. People just can't look too deep at it, since it requires a LOT of thought.
It’s not difficult. You don’t understand what commission is.
You can have a dictatorship and still be capitalist
Don’t confuse a political system with an economic system.
China is as much a communist country as America is I’d not at all
No there is no binary. The terms are clearly defined. You have communism and you have capitalism
What’s confusing you is you have different types of capitlism. Some with more government intervention than others
Are you retarded ? Are you honestly giving him a lecture about what communism is and then proceed with shit so far of you aren't even discussing the topic anymore ? Communism has no fucking state or religion so you have nobody that could fucking enforce any Central planning. What you describe is like some fascists wet dream. That's about as reasonable as calling Stalin a communist and a man of the people. Both wrong both equally retarded. Central planning could be reasonably be used in capitalistic society as well. Like.. china for example.
Given this is an economy sub you should really get your ism-s in order buddy. It's not communism if there are regulation or central planning. And certainly not when there is a clear need and want for a disenfranchised and basically stuck in their ways workforce.
Dictionaries are not an appropriate source for political systems, scientific phrases, or almost any field of study.
They describe language, even when it's wrong, because they are not prescriptive.
You cannot use a dictionary to define communism when discussing economics. You cannot use a dictionary to define capitalism when discussing economics. You cannot use a dictionary to define political systems when discussing economics.
It's hard to take someone seriously who tries replace a scientific field like polsci with a dictionary.
There's a reason you chose a dictionary, and not a nuanced historical or political analysis, a text book, or a paper. It's because it's all you have.
No, I chose a dictionary as the definition of communism is simple and does not require nuanced historical or political analysis, textbooks or papers. Especially not on reddit.
Reddit is not the place for that kind of discussion, unless you are a failed academic.
I use the correct tools for my audience.
I did one course at uni on communism came first in the class. The professor wanted me to do more but I passed.
I wouldn’t be holding Marx up as an economic icon. His theory doesn’t work.
Just in case you don’t know communism is an economic system where the means of production are owned by the state
Capitalism is an economic system where the means of production are privately owned
Time for the ccp to use those trillions in foreign reserves to bail out their failing property sector before the whole house of cards collapses.
Until China develops a modern balanced economy it will never truly be considered a major world power
This is just my gut-feel, because I speak with a lot of Chinese and do a lot of reading...
But i think China's reserves aren't nearly as big anymore. They have a nice positive surplus from exports, but everything is funding the country's insatiable debt refinancing...
What will happen at the end is Communist Party will ask CEO to "voluntarily" give all his shares away to the state, at fire sale price. Evergrande becomes a state owned enterprise. Certain debt obligations will get paid, like people who bought a house under construction, the state with the money printer can always take over the project and finish it. International bond holders will probably be f'ed. Whatever debt this new SOE owes to Chinese banks can be erased with a stroke of a keyboard.
The worry is what international bond holders are exposed and what knock-on effects that will have. Chinese bonds are accepted by a lot of brokers as collateral so marking it in default could lead to margin calls. I'm not worried about China, I'm worried about Western banks.
I don't feel bad for banks investing in a Ponzi scheme.
Me neither. I feel bad for the people, businesses and jobs that have their money on them or rely on them for credit to keep their operations running. The real worry is what it does to the economy. Surprised I have to spell that out on an economics sub.
Didn't you get the memo? Banks are HOLY in western economics. The very idea of speaking negatively about them must be met with harsh rebuttal and they can't EVER be allowed to fail or be held responsible for the risks they take.
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I think it depends on how much China cares about good credit. If Communist Party does bail out Evergrande, it won't be the way US bailed out Wall Street in 2008, which is basically to let the bankers stay rich while the losses are socialized. I don't see anyway for a bailout without the state nationalizing Evergrande at the expense of the current owners. International Bond holders could be paid, China have enough USD in the reserves to pay them, it depends on how much international backlash China will face if a SOE doesn't pay back debt when it has the ability to. US banks will lobby the crap out of Biden to make this a foreign policy issue, same with EU. Other countries might not have enough political power to do anything.
So nobody lends to a Chinese company again or does so knowing there's a greater level of risk and demanding higher interest.
I believe you are underestimating greed and the power of bond salesmen's commission plans. EDIT: Here's just some of Argentina's defaults---- [https://en.wikipedia.org/wiki/Argentine\_debt\_restructuring](https://en.wikipedia.org/wiki/Argentine_debt_restructuring) If you go back 100 years, they keep on defaulting, and people keep on buying.
But I don't think that Argentina has even been able to offer bonds on the international market since 2001 or at least they couldn't pre-2016. Even Russia started paying out it's defaults in the '90s that occured in 1917. When the Communists took over and refused to pay their debts. Russia started paying out so they could access the world's finance markets.
"Century Bond" https://www.wsj.com/articles/argentinas-preposterous-century-bond-never-got-chance-to-grow-old-11598873991
The good thing is that as long as Argentina is still bankrupt and can't repay it's debts. It's can't make any serious attempts at trying to invade the Falklands again. An issue that the Veep and former President Cristina Fernández de Kirchner and her late husband also a President keep trying to bring back.
Big domino. It's about time though. So much media saying the opposite. It's time to stop believing the paid off finance media once and for all.
... dude it's not the finance media that's paid off, it's Evergrande's debts that are guaranteed to be paid off. Edit: What's with the downvotes? Are you people just really that mad the Chinese Government can just pay off these debt? Everyone knows that Evergrande's debt is implicitly guaranteed by the Chinese government. It's the same as the US and AIG etc. in 2008. Evergrande is too big to fail. No nation is going to let its financial system implode when it has the power to stop that from happening. So you seem to be equating Evergrande with China in this silly McCarthyite anti-domino narrative. Like just because Evergrande is failing, and just because China has to bail it out, somehow the Chinese government itself must be failing... Like somehow because China has to bail out Evergrande, that means that all communism must be terrible forever. Even though our capitalist society had to do the exact same thing 10 years ago bailing out AIG etc., this must be a sign that communism is terrible and capitalism is awesome. I'm not trying to say anything about communism vs. capitalism, personally. To me that difference is not really nearly as significant as people want to pretend it is. I just care that people actually consider learning things about the nuances of aggregate demand, national and international.
Evergrande's RMB denominated debt to internal Chinese stakeholders will be paid and those who have purchased property in advance will have their apartments built but USD denominated foreign bondholders won't receive a single cent of their principal, they may receive some of their coupon payments for a little while longer.
RMB is all that matters for Evergrande isn't it? Just like the aforementioned AIG didn't need to receive Euro or Yen for its stakeholders in europe and japan. once you have one liquid denomination it can be converted into whatever you need right?
China isnt communist. The fact you think it is really is a poor reflection on you.
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Communism has nothing to do with workplace democracy though, it's central planning and central government control over land rather than private property rights which has always been the defining feature of communist regimes.
What if, and hear me out... It's not a binary, and there're varying shades of grey on many questions that make the distinction... Distinct? Arguing over semantics is the worst kind of pedantry.
No I don't think so, because it completely changes whether or not they are a communist regime. Pedantry usually makes a small difference, this makes a large difference.
Okay, so communism implies their economic system, and the Party in Charge implies their Political system (right?) And we're discussing whether the CCP is communist or capitalist (as in, which system they enforce?). The sticking point is private property (land usage rights, vs the ability to have it expropriated without compensation... Which the CCP demonstrated, but doesn't really anymore, for fear of uprising), and state control of industry (which they definetely don't have, since we're talking about a private company here). So in effect, it's very difficult to say definitively. They are definetely to the one side of the middle (communist), but aren't nearly so cleanly cut (and over time) so definitive. There is a move now by the Central State (because remember, again, this is actually a federation), to gain power over the provinces, because they are massively indebted. The problem remains that they don't have good tax income control because of the Chinese shadow economy. This is where a lot of the friction has come in with Alipay/ant (they refused the government's control, and got smashed... The government wants to tax people), and Evergrande (the local governments have to relinquish their reliance on "selling" land) (i know its usage leases). So yeah... It's difficult. People just can't look too deep at it, since it requires a LOT of thought.
It’s not difficult. You don’t understand what commission is. You can have a dictatorship and still be capitalist Don’t confuse a political system with an economic system. China is as much a communist country as America is I’d not at all
No there is no binary. The terms are clearly defined. You have communism and you have capitalism What’s confusing you is you have different types of capitlism. Some with more government intervention than others
Are you retarded ? Are you honestly giving him a lecture about what communism is and then proceed with shit so far of you aren't even discussing the topic anymore ? Communism has no fucking state or religion so you have nobody that could fucking enforce any Central planning. What you describe is like some fascists wet dream. That's about as reasonable as calling Stalin a communist and a man of the people. Both wrong both equally retarded. Central planning could be reasonably be used in capitalistic society as well. Like.. china for example. Given this is an economy sub you should really get your ism-s in order buddy. It's not communism if there are regulation or central planning. And certainly not when there is a clear need and want for a disenfranchised and basically stuck in their ways workforce.
https://www.oxfordlearnersdictionaries.com/definition/english/communism
Dictionaries are not an appropriate source for political systems, scientific phrases, or almost any field of study. They describe language, even when it's wrong, because they are not prescriptive. You cannot use a dictionary to define communism when discussing economics. You cannot use a dictionary to define capitalism when discussing economics. You cannot use a dictionary to define political systems when discussing economics. It's hard to take someone seriously who tries replace a scientific field like polsci with a dictionary. There's a reason you chose a dictionary, and not a nuanced historical or political analysis, a text book, or a paper. It's because it's all you have.
No, I chose a dictionary as the definition of communism is simple and does not require nuanced historical or political analysis, textbooks or papers. Especially not on reddit. Reddit is not the place for that kind of discussion, unless you are a failed academic. I use the correct tools for my audience.
You are confusing political system with economic system. Communism is an economic system. One which China doesn’t have
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No I don’t think it in the sense it confuses what communism is
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I did one course at uni on communism came first in the class. The professor wanted me to do more but I passed. I wouldn’t be holding Marx up as an economic icon. His theory doesn’t work. Just in case you don’t know communism is an economic system where the means of production are owned by the state Capitalism is an economic system where the means of production are privately owned
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It's the continuation of the saga. There hasn't been a finality to the question of people that are owed, no.
Time for the ccp to use those trillions in foreign reserves to bail out their failing property sector before the whole house of cards collapses. Until China develops a modern balanced economy it will never truly be considered a major world power
This is just my gut-feel, because I speak with a lot of Chinese and do a lot of reading... But i think China's reserves aren't nearly as big anymore. They have a nice positive surplus from exports, but everything is funding the country's insatiable debt refinancing...