information How Will a Chinese Economic Hard Landing Impact Domain Investors?

[Whizzbang]

I’ve taken a great deal of interest in the Chinese economy of late and I’ve written a number of articles that outline how everything is not so good in the dragon nation. Debt continues to skyrocket, GDP is levelling off and there appears to be stockpiles of commodities that are unused. So how is this all going to impact domain investors?
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[Together4Forever]

I agree to you 100% & being closely monitoring Chinese Economy myself, As it being the Biggest competitor to India Manufacturing Sector. I second the thought that Liquidity is getting a problem along with rising cost economy has already come down. The govt is trying to Increase benefits & Reduce Taxes to artificially sustain it from falling down and the best example for seeing that is the China Govt Dominance in Stock Market. Its surely isnt a free trading market anymore.

Further wall, Will surely increase the need of cash leading to Chinese Investors to let go of Chips specially at lower end of 4L, 4N, 5N. These will surely fall like blocks. I feel the 3L & 3N will see some correction also but as majority is owned by Heavy Investors, the Fall wouldn't be that big, i feel it should be a 20-30%Correction in this case.

 

[Whizzbang]

I agree to you 100% & being closely monitoring Chinese Economy myself, As it being the Biggest competitor to India Manufacturing Sector. I second the thought that Liquidity is getting a problem along with rising cost economy has already come down. The govt is trying to Increase benefits & Reduce Taxes to artificially sustain it from falling down and the best example for seeing that is the China Govt Dominance in Stock Market. Its surely isnt a free trading market anymore.

Further wall, Will surely increase the need of cash leading to Chinese Investors to let go of Chips specially at lower end of 4L, 4N, 5N. These will surely fall like blocks. I feel the 3L & 3N will see some correction also but as majority is owned by Heavy Investors, the Fall wouldn't be that big, i feel it should be a 20-30%Correction in this case.

Agree with your numbers as well....the 20-30% decline will really depend upon the market depth for the domains and if there are any financially strapped market makers that need to dump their assets.

What I didn't get into is that Chinese banks are packaging up and selling their loans to get them off their balance sheets so that they can then lend out more money. The money they are lending are in many cases going to the people that are buying the loans! There's some crazy stuff going on here where I'm only just beginning to scratch the surface.

 

[deez007]

On the flip side, I see domaining as really good way for Chinese business people and as well as the wealthy to get money out the country discreetly.

So perhaps the tough economic climate in the country could lead to more people trying to launder money out the country. Just a thought....

 

[JayT]

They'll do what everyone else will be doing, trying to rid themselves of paper money by buying real assets, whatever their fancy. Most likely precious metals, art, jade, ivory and land for the Chinese. They'll buy domains too though, computers and internet are here to stay.

 

[JayT]

On the flip side, I see domaining as really good way for Chinese business people and as well as the wealthy to get money out the country discreetly.

So perhaps the tough economic climate in the country could lead to more people trying to launder money out the country. Just a thought....

I don't think money leaving the country is as big of a deal as you make it out to be. They don't want physical yuan leaving, but they have ~3 trillion USD to spend probably sooner than later and I bet they are eager to buy those things I mentioned above from outside China. People leaving is probably not even a big deal. I think some are encouraged to start concentrated communities around the world. Ever notice how they drive up prices? That is because the last remaining properties won't sell, until it irresistible. It's seemingly planned to buy out everything in an area, an MO, because it doesn't make sense otherwise. Of course laundering money is always bad, but believe there are channels to get out. It's not like they're prisoners there that can't leave.

 

[Jurgen Wolf]

In 90-95% of cases I don't see any investors...
Just newbies (sponsors) that burn their money and no more.

 

[JayT]

In 90-95% of cases I don't see any investors...
Just newbies (sponsors) that burn their money and no more.

Yea I can hardly believe it either. All you have to do is search any random 4L chip and see that they're almost all taken in many extensions like .me, .xyz, .top, .vip, .cc, .win, .club, .pro, .red, .click, .biz, .link...the list goes on and on. Of course 88888888888888.anything or similar is taken.

Laughing at how ludicrous it is! Most 4L chip .com can be bought for 2k, which is very little to a serious company. 4L.COM isn't even as memorable as people try to make it out to be in the first place. I am not likely to remember TBRG.COM or anything of the sort, just 5 minutes after seeing it.

Truly good (memorable) domain names are real or at least pronounceable words! Chinese are not so familiar with English...it is a completely different market. I understand they like acronym, but domain investors are taking too much risk there...worse being foolish noobs! I don't even want to hear about the domain and currency crap neither, that's even more sickening. Have fun paying $10+ yr to hold your 4L CHIP that no one wants though.

Domain market is soft because they now realize, like every noob, that they can't and will probably never sell that garbage. And no, lowering the price to .01 won't convince me to buy the garbage!

At least a lot more Chinese are now aware of domains, and that they can be very valuable. Hopefully they keep investing, because eventually they'll figure out what good domain names really are, and bid the better ones up.

 

[Jurgen Wolf]

And almost all of them will be dropped next year.

 

[Jurgen Wolf]

p.s. For example, I work with 3L.me for many years... and I didn't receive any offers from Chinese endusers.
Didn't see them at all.

 

[jmcc]

The fallout won't be limited to domain investors. There is the risk of a psychological shock in seeing the the monthly figures for .com go negative and Verisign has already issued a statement on the Chinese registration rates not being sustained and stated that the expected renewal rate of these registrations may not follow normal renewal rates. It also said that the one year renewal rate for .com is 50%. That means of the domains registered in May 2015, approximately half will drop. Now there's a lot of fanboi-ism about .com and how it is different from other TLDs but it may be about to crash into a brickwall of drops. The renewal rate for .com has been falling from about 70% for 2004 domains to around 50% for 2015 domains. The renewal rate on Chinese hosters/resellers/registrars is not as strong as some North American and European hosters/resellers/registrars and the historical trends, which most domainers don't see, could see renewal rates in the Chinese market below typical 50% rate with some in the market having renewal rates below 20%.

Regards...jmcc