> The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens
While there are still risks for the economy from real estate, I think China has shown the ability to manage them. For one, they were able to slow-walk the Evergrande collapse and move developments to state-owned companies. If it should become necessary again they will repeat the process.
Besides that, new Hukou regulations are planned to encourage rural migrants to move to urban areas with housing oversupply.
> they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment)
China can produce 65nm chipmaking gear domestically which is like 20 years behind the West. Even if they develop at twice the speed, this means in 10 years they will be where the West is today.
The question is rather, can the West keep the rate of progress? ASML has already warned that lost business from sanctions will impact their ability to invest in R&D.
Rural migrants can’t afford $1 million for a one bedroom flat in Shanghai or Beijing, or a $2-300k one bedroom in a tier 88 city. This bubble is going to pop, and real estate in China will stabilize to more affordable Japanese housing prices (well, that’s my prediction).
Just letting the real estate companies fail isn’t going to much, everyone knew Evergrande was doomed back in 2012 when that trader in HK was banned for shorting it.
While there are still risks for the economy from real estate, I think China has shown the ability to manage them. For one, they were able to slow-walk the Evergrande collapse and move developments to state-owned companies. If it should become necessary again they will repeat the process.
Besides that, new Hukou regulations are planned to encourage rural migrants to move to urban areas with housing oversupply.
> they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment)
China can produce 65nm chipmaking gear domestically which is like 20 years behind the West. Even if they develop at twice the speed, this means in 10 years they will be where the West is today.
The question is rather, can the West keep the rate of progress? ASML has already warned that lost business from sanctions will impact their ability to invest in R&D.