news More bad news for China.

[RU]

China needs $5 trillion to save its economy — and it might not work anyway.

The country is dealing with a falling currency, an incredibly volatile stock market, and thinning corporate margins in sectors that used to drive the country's growth.

As the yuan depreciates, cash is leaving the country at a stunning rate. In December alone China spent $108 billion of its $3.4 trillion foreign-exchange-reserve stash trying to keep the yuan from depreciating faster than it has. The country has stepped up already tight capital controls to keep its house in order,according to the Financial Times.

Read more: http://www.businessinsider.com/china-needs-5-trillion-to-save-its-economy-2016-1

 

[Constantin S]

I wouldn't jump and believe this $5.7 trillion number. This crisis appeared just few days after new year, we all know that China has the largest economy and as I remember they weren't that affected by the big economic crisis back years ago, why would they be now by a "crisis" that theoretically appeared in like a week?

 

[Flipsbay]

i still see in my computer desktop there are more then 70% products that has "Made in china" tag on it and this will keep that way for another 10 years. Anyway be aware guys a lot is being said about china these days.

Lets see what happens

Thanks.

 

[nvdomains]

Serious crisis is there. No doubt about it. How they tackle it? Who will be affected and its implications.

Being a closed economy, difficult to comment.

 

[Mervyn]

The Chinese economy is far from being in crisis - were it the US of Japan these numbers would be scary. The true scale of what is going on it China (and ultimately what potential exists in that economy) can only be understood if you've actually been there or done business with them directly. Non-Chinese media is hyping up the story because the numbers are huge by traditional markets standards but in China - these loses will be absorbed and resolved way before the oil market rebounds for example.

I think the only scary thing in the story is that the Chinese government still thinks they can control the market and their actions caused more blood on the market floors than was necessary. That aside, China is still a monster economy with tons of money and that isn't changing any time soon and unless if you're in the Chinese stock market, I wouldn't loose much sleep over it either.

 

[theSun]

The Chinese economy is far from being in crisis - were it the US of Japan these numbers would be scary. The true scale of what is going on it China (and ultimately what potential exists in that economy) can only be understood if you've actually been there or done business with them directly. Non-Chinese media is hyping up the story because the numbers are huge by traditional markets standards but in China - these loses will be absorbed and resolved way before the oil market rebounds for example.

I think the only scary thing in the story is that the Chinese government still thinks they can control the market and their actions caused more blood on the market floors than was necessary. That aside, China is still a monster economy with tons of money and that isn't changing any time soon and unless if you're in the Chinese stock market, I wouldn't loose much sleep over it either.

Great minds think alike. History always repeat himself, and wealth only tends to favors the bold.

 

[premkumar]

5 trillion is false figure. To understand China is not USA, Almost all it local govt and other govt debt are owned by govt's other hand like state owned bank, govt financial institute, central bank and so on. So it like right hand lending to left hand. For a country to broke like Greece or Argentina, they lender should be outsider like foreign banks, private institutes, IMF, world bank or foreign govts. That is not the case for China. Not just for China most developing country like India or any under develop countries are not financed by outsider, they are by their own govt institutions. So no way they going to broke that to given they hold 3 Trillion $ reserve and complete control over currency valuation, no way for it. At most they slowdown and content smaller growth like 5 to 6% which is still western country only can dream off.

 

[Kate]

we all know that China has the largest economy and as I remember they weren't that affected by the big economic crisis back years ago, why would they be now by a "crisis" that theoretically appeared in like a week?

That crisis is not new at all. It's new only to those who rely on mainstream news. It's been brewing for years. The Chinese economy is riding on a bubble. Everybody knows the fundamentals are wrong and that some correction is to take place.

Almost all it local govt and other govt debt are owned by govt's other hand like state owned bank, govt financial institute, central bank and so on. So it like right hand lending to left hand. For a country to broke like Greece or Argentina, they lender should be outsider like foreign banks, private institutes, IMF, world bank or foreign govts.

There is no free lunch. There's always bound to have consequences when you get in debt irresponsibly.

in a scenario like this, what can happen for example is depreciation of the national currency. That translates as erosion of spending power or downright impoverishment for currency holders, that is pretty much everyone living in China. When they stop spending money abroad, you will feel it to some extent.

 

[HUKU]

At most they slowdown and content smaller growth like 5 to 6% which is still western country only can dream off.

If you look at the word on Wall Street, I dont think anyone really believes China's official GDP figures and many think it is already performing at around 5% at best. Governments often massage the figures and there are so many other gauges of GDP. Import of Raw Materials, Electricity Consumption, Baltic Dry Index, etc indicate that it could be much lower than that.

China is facing a serious credit crunch - there's way too much leverage in the system and misallocation of capital. So China is going through a rough patch but it'll get through it for sure. Don't forget that the USA got through the great depression during its historic rise and China no doubt will face some challenges of its own along the way to the top spot.

 

[HUKU]

That crisis is not new at all. It's new only to those who rely on mainstream news. It's been brewing for years.

That's precisely right. People on Wall Street especially the short sellers (Jim Chanos et al) have been talking about this for many years. The only debate was whether China would face a soft landing or a hard landing and every year the prevailing view seems to alternate between the two possibilities. Right now, I think it's just beginning to look like it's going to be a hard or harder landing.

 

[80-20]

China in trouble?
What about the USA?

At least China manufactures (lots) of things.
What the USA manufactures? Paper dollars!

Chinese government controls the economy?
Perhaps, but how worse is it from the Wall Street and Fed Reserve manipulating the USA and the rest of the world?

Get real, people.

 

[mitok]

US national debt is around 19 trillion and growing. US is the country with biggest debt in the world. It is a fact. Should we stop buying .com keyword domains as crisis is possible any second?

 

[Kate]

China's case is a bit different: economic bubble coupled with large-scale capital flight to circumvent government/exchange controls. Americans have not stopped using the USD even at the worst of the 2008 crisis. China isn't really a free-market economy, it is still tightly controlled. Certainly more than in the US.

 

[James Rodman]

if i remember correct there are more millionaires in china than there are people in the USA. so i think china will be fine in terms of buying domains

 

[Argentum]

Domain market is overhated because of Chinese, it's no matter what is economy situation in China or whatever else..

 

[Tytus]

The only nation in massive trouble is Canada, China doesn't have anything to worry about. They export everything. Canada exports nothing, the dollar is sinking faster than a sack of bricks thrown into the ocean.

 

[RU]

After pouring money into real estate, stocks, and ahost of less orthodox investments,there are warning signs that Chinese investors jump into domain names may be causing another bubble.

Read more: http://qz.com/581248/chinas-latest-investment-craze-is-short-domain-names/

 

[HUKU]

US national debt is around 19 trillion and growing. US is the country with biggest debt in the world. It is a fact. Should we stop buying .com keyword domains as crisis is possible any second?

It's impossible to predict what the behavior will be in response to policy. If I try to calculate logically, the Chinese should be wanting to move their money into assets that will not be devalued. I'm sure some will flee into USD if they can but the most convenient options for the wealthy would be Gold and other things like Bitcoins and gains have been seen there in the last few weeks as you may be aware. I do expect that to continue somewhat.

I don't see why Domains should not benefit (before) a devaluation as money flows out of China but if there is a sudden devaluation, then we can expect a sudden and commensurate drop off in purchases from China.

All I can recall is that when we held Domain Names during the 2008 crisis whilst banks were collapsing and being nationalized and there were lockdowns in place, having some value tied up outside the stockmarket, the currency and the banking system in other assets (including Domain Names) was certainly not a bad idea. In the worst case scenario, they lose value for a couple of years until things stabilize. Oddly enough, that's exactly how it played out both in 2001 and 2008 both of which turned out to be a good time to buy domains.

There's definitely too much debt in the world and a lot of expectation of volatility and crisis but I don't think anyone expects the Internet to close up anytime soon...

 

[mitok]

Shanghai SE Composite index closed at -5.33%.
Minus was about 2-2.5% the whole day, and before closing increased to -5.33. Investors probably wanted to avoid traded to be stopped (when minus come to 7%) but they were motivated to sell.

Domains could benefit from this, but we should be real and realize that the most of stock investors on Shanghai SE are still not even aware of domains.

 

[James Rodman]

After pouring money into real estate, stocks, and ahost of less orthodox investments,there are warning signs that Chinese investors jump into domain names may be causing another bubble.

Read more: http://qz.com/581248/chinas-latest-investment-craze-is-short-domain-names/

This article doesnt really say anything lol. They basically explained what domains are and what sales were made. As far as this bubble goes noone knows for sure whats gonna happen . So if you re investing in these chinese domains only play with money you can afford to lose In my opinion. But hopefully everyone on here makes some good money on these chinese names and we all win at the end

 

[domain hacks]

Using BusinessInsider as a source...oh man....

 

[kemjika11]

This whole "China is broke" might really just be another MSM propaganda to weaken CHina financially. "News" and "bad information" affect markets because its affecting perceptions of people and their actions.

IMO China is far from broke. How can CHina be broke? those guys are too smart and have saved good amounts of money. They dont bleed their money thru impulsive foolish consumerism like some countries...lol.
And China's economic might is so big that domaining industry doesnt need large % of chinese to invest in domain names. Just a small percentage with some serious cash is enough to move the industry so lets not tie domain industry and its future to the whole of China's economy.

 

[asset.domains]

need some macroeconomy pro advise..

 

[Hugo_Strange]

China in trouble?
What about the USA?

At least China manufactures (lots) of things.
What the USA manufactures? Paper dollars!

Chinese government controls the economy?
Perhaps, but how worse is it from the Wall Street and Fed Reserve manipulating the USA and the rest of the world?

Get real, people.

The issue runs much deeper than just manufacturing...