Why China’s Local Government Debt Crisis Just Got Worse

I currently work in construction throughout Asia, primarily in Japan and China. I am a risk-taker and a dividend investor. My wife and I have invested in the S&P500, both through my TSP with the government and through Fidelity in her 401(k). We cashed out $270k from the S&P and invested with a Financial Planner, MonicaMary Strigle. Until about three years ago, we were 100% invested in the S&P after over 30 years. I am retiring at the end of this month at 62, while my wife will retire next year at 60. Under Monica's guidance, I purchased Bitcoin, Ethereum, Solana, and Cardano during 2022, resulting in 173% gains in 2023. I anticipate further growth in 2024, along with other speculative assets, including shorting the Chinese Index two weeks ago. Currently, we have $3.7 million in our tax-deferred savings. I am sharing this for anyone seeking advice on how to navigate these challenging times.

If you dig holes and fill them in you're increasing GDP.

If China's real estate crisis triggers a market crash or a financial crisis, it could send shockwaves through the stock markets worldwide. I’m worried about my investment of over $600K stocks. Is this a time to consider diversifying my portfolios?

Another point to make on the local government’s over reliance on infrastructure projects, is not just just that they don’t increase productivity, but that they can actually lower productivity due to maintenance costs. If you spend all your money maintaining bridges that no-one needs to use, you aren’t able to invest in other, more productive areas of the economy.

You mean just telling people to "grow this much" every year doesn't magically allow them to come up with sustainable ways to do so?

Chinese property sector, which accounts for 30% of GDP, is crashing. - Exports and imports, accounting for 37% GDP, are down. - Foreign investment (FDI) is falling over 90%, lowest in 3 decades. - Foreign visitors are down 96% compared to the pre-pandemic level in 2019. - Consumer prices are experiencing deflation. - Youth unemployment hits over 21%, a record. - Its fast-shrinking workforce is 10 years older than neighboring countries. Still, China keeps reporting outrageous GDP numbers. Lol Where does the growth come from?

Would you say they’ve built a bridge too far? …. I’ll see myself out 😂

There are three kinds of lies: lies, damned lies, and GDP.

The comment section is filled with strangely defensive and naive comments. Within 20 minutes already

Financial planning is like navigation. If you know where you are and where you want to go, navigation isn't such a great problem. It's when you don't know the two points that it's difficult

When you reach a point where all your income is only enough to cover the interest rates, you're technically bankrupt...

You're forgetting that if you abruptly stop construction projects, infrastructure projects especially those who have already started construction, this will cause a large ripple effect on the economy. Im not talking about its effect on china's gdp numbers but the construction downstream industry. For example, the steel and cement industry has already programmed future projects that would require more of their material some years ago, abruptly stopping them would cause problems with their liquidity and future loan payments. And what about the construction workers who relied on construction projects for their income. And other support industries who directly and indirectly rely on these projects. Result is many small businesses might close or go bankrupt. Even entire small communities will go bankrupt, unemployement will rise. And add all these up and you worsen deflation and not to mention social unrest

It's fascinating how this is both incredibly similar to the debt issue ravaging English local councils with the almost exact output - English councils basically went bankrupt investing in strange business deals or trying to cover costs for lawsuits they lost.

The chinese demographic collapse was always going to spell doom for the housing bubble. Now it's spells doom for infrastructure maintenance, It's GDP and bridges will collapse.

I love two countries, China and Tibet. Greetings from the Japanese Senkaku Islands.

In 2023, real China's 🇨🇳 economy shrank -3.5% as opposed to 5.2% expansion as officially announced. - So this year, they will just publish a 5% growth regardless of their economy.

So you’re telling me that China is like your one neighbor that keeps buying new cars even though he has no use for them and ended up in lots of debts.

I've always wondered, if local governments are paying for things but the taxes are going to the central government, what are those taxes going towards?

This is a very well put together and informative video. more like this.

you didnt just miss the perfect opportunity to say this was a bridge too far??