INFLATION...

[GZBILL]

We are now up 45% on our house investments in one year...

 

 

Uh huh ... just try to liquidate it and get the money out of the country in some useful form ...

 

These are places where we will be living, and eventually go to Laopo's son...

 

Maybe. Maybe not. Although the property laws have recently changed to allow perpetual use of property (inasmuch as anything can be perpetual in China), the implementation regulations have yet to be enacted. Laopo's son may be living under a bridge if your home is the only one he depends on.

[GZBILL]

For you fence-sitters out there who are thinking about buying a house in China "some day... " between inflation and the drop in the dollar... my advice would be...JUST DO IT... We are now up 45% on our house investments in one year...

 

It's still a darned good time to buy in my opinion, it's just going to cost more to get "in the game".

 

Smart money now is on waiting before buying real estate. Property prices in Shanghai and Shenzhen are starting to drop -- especially in medium to high-end units. Although not always, most of the time Beijing and, later, Guangzhou start to follow. When that happens, the rest of the country is not at all far behind.

[chilton747]

We are now up 45% on our house investments in one year...

 

 

Uh huh ... just try to liquidate it and get the money out of the country in some useful form ...

 

These are places where we will be living, and eventually go to Laopo's son...

 

Maybe. Maybe not. Although the property laws have recently changed to allow perpetual use of property (inasmuch as anything can be perpetual in China), the implementation regulations have yet to be enacted. Laopo's son may be living under a bridge if your home is the only one he depends on.

 

Hey Bill can you explain to me what perpetual use of property in China involves?

[Don]

For you fence-sitters out there who are thinking about buying a house in China "some day... " between inflation and the drop in the dollar... my advice would be...JUST DO IT... We are now up 45% on our house investments in one year...

 

It's still a darned good time to buy in my opinion, it's just going to cost more to get "in the game".

 

Smart money now is on waiting before buying real estate. Property prices in Shanghai and Shenzhen are starting to drop -- especially in medium to high-end units. Although not always, most of the time Beijing and, later, Guangzhou start to follow. When that happens, the rest of the country is not at all far behind.

 

If you buy far from the speculative markets like Shanghai, Shenzhen, Beijing you should be okay. Many of those homes in Pu-Dong are not even occupied. Just bought to hold till later. Look at those tall sold out buildings, most of the lights are dark. A lot of softness, many empty units. In land near the big industrial areas(Chongqing, Chengdu, Dalian), growth has been much slower and market might have the room to continue advancing. All of these cities do not have the huge number of empty units just bought for speculation We will see, nothing is for sure.

[chilton747]

For you fence-sitters out there who are thinking about buying a house in China "some day... " between inflation and the drop in the dollar... my advice would be...JUST DO IT... We are now up 45% on our house investments in one year...

 

It's still a darned good time to buy in my opinion, it's just going to cost more to get "in the game".

 

Smart money now is on waiting before buying real estate. Property prices in Shanghai and Shenzhen are starting to drop -- especially in medium to high-end units. Although not always, most of the time Beijing and, later, Guangzhou start to follow. When that happens, the rest of the country is not at all far behind.

 

I know that Shanghai and Shenzhen have become "through the roof" with their housing costs for the last year or so. Curtailing these very high prices will really affect the middle end of the smaller cities? Some of the prices that I have seen recently are really not "that" high and I couldn't even imagine them going lower. Perhaps the more expensive cities will level or drop off but I have my doubts about the smaller cities. I think at most the prices in the smaller cities will level off.

[GZBILL]

For you fence-sitters out there who are thinking about buying a house in China "some day... " between inflation and the drop in the dollar... my advice would be...JUST DO IT... We are now up 45% on our house investments in one year...

 

It's still a darned good time to buy in my opinion, it's just going to cost more to get "in the game".

 

Smart money now is on waiting before buying real estate. Property prices in Shanghai and Shenzhen are starting to drop -- especially in medium to high-end units. Although not always, most of the time Beijing and, later, Guangzhou start to follow. When that happens, the rest of the country is not at all far behind.

 

I know that Shanghai and Shenzhen have become "through the roof" with their housing costs for the last year or so. Curtailing these very high prices will really affect the middle end of the smaller cities? Some of the prices that I have seen recently are really not "that" high and I couldn't even imagine them going lower. Perhaps the more expensive cities will level or drop off but I have my doubts about the smaller cities. I think at most the prices in the smaller cities will level off.

 

I think the prices in smaller cities will drop even further -- percentage wise -- than those in bigger cities. Take, for example, Qingyuan. Prices there have risen there over 100% in 3 years, but income levels have not risen more than 15% in the same period of time. Even from the aspect of supply and demand, there is no reason whatsoever for those increases in housing prices other than for speculation.

 

Perpetual use means you aren't constrained by the 70-year land lease rule. The People's Congress passed legislation stating that people can keep their property forever (we, except for eminent domain), but this has to be further refined in the implementation regulations.

 

Generally speaking, from the time congress passes a law and when implementation regulations are finally implemented, >5 years have passed.

[chilton747]

My wife and I were just talking about this. She says that the China banks are slowing down the loaning of money because people are buying the houses and renting them out to people who can't afford to buy houses. She says the Chinese government does not like this and the government wishes to make the housing for the poorer people. Any idea of what she is talking about?

[Don]

My wife and I were just talking about this. She says that the China banks are slowing down the loaning of money because people are buying the houses and renting them out to people who can't afford to buy houses. She says the Chinese government does not like this and the government wishes to make the housing for the poorer people. Any idea of what she is talking about?

 

China has never like landlords. It does large government based housing or work based housing. They provide these homes at low rates.

[GZBILL]

My wife and I were just talking about this. She says that the China banks are slowing down the loaning of money because people are buying the houses and renting them out to people who can't afford to buy houses. She says the Chinese government does not like this and the government wishes to make the housing for the poorer people. Any idea of what she is talking about?

 

The People's Bank requires all who purchase homes to pay a minimum of 40% down on new homes. Mortgage amounts can be for no more than 60% of the appraised value -- which must be equal to or lower than purchase price.

 

For those buying second homes, the mortgage interest rate carries a 10% premium.

 

In some areas property prices have started to fall, but the government says they expect to see prices start to lower by Q1 2008. If they do not, further measures will be taken to reduce financing and development of new housing units.

[DMikeS4321]

P.S. In my judgement, inflation in the yuan is nicely offset by the falling dollar.

 

Anyone have an opinion on this?

 

Ummmm I don't quite get your comment Mike...If I had all my assets in China and was going to collect SS and my pension in RMB instead of dollars then OK... but since I don't, every fall in the dollar means I will have less money to live on in China...

 

Sorry, Rog, I wasn't clear. My thought was investing weak dollars in RMB denominated investments, but while living in the U.S. As the dollar drops and the RMB rises, we can benefit on both ends. You are absolutely correct in your analysis of retirement income based on $$$.

[chilton747]

My wife and I were just talking about this. She says that the China banks are slowing down the loaning of money because people are buying the houses and renting them out to people who can't afford to buy houses. She says the Chinese government does not like this and the government wishes to make the housing for the poorer people. Any idea of what she is talking about?

 

The People's Bank requires all who purchase homes to pay a minimum of 40% down on new homes. Mortgage amounts can be for no more than 60% of the appraised value -- which must be equal to or lower than purchase price.

 

For those buying second homes, the mortgage interest rate carries a 10% premium.

 

In some areas property prices have started to fall, but the government says they expect to see prices start to lower by Q1 2008. If they do not, further measures will be taken to reduce financing and development of new housing units.

Did I just come under the wire with my 30/70 loan or do you think I got lucky?

[GZBILL]

My wife and I were just talking about this. She says that the China banks are slowing down the loaning of money because people are buying the houses and renting them out to people who can't afford to buy houses. She says the Chinese government does not like this and the government wishes to make the housing for the poorer people. Any idea of what she is talking about?

 

The People's Bank requires all who purchase homes to pay a minimum of 40% down on new homes. Mortgage amounts can be for no more than 60% of the appraised value -- which must be equal to or lower than purchase price.

 

For those buying second homes, the mortgage interest rate carries a 10% premium.

 

In some areas property prices have started to fall, but the government says they expect to see prices start to lower by Q1 2008. If they do not, further measures will be taken to reduce financing and development of new housing units.

Did I just come under the wire with my 30/70 loan or do you think I got lucky?

 

Could be either. It does take time for these policies to filter down to smaller towns and villages. In GZ, though, it's 40% without exception.

[chilton747]

My wife and I were just talking about this. She says that the China banks are slowing down the loaning of money because people are buying the houses and renting them out to people who can't afford to buy houses. She says the Chinese government does not like this and the government wishes to make the housing for the poorer people. Any idea of what she is talking about?

 

The People's Bank requires all who purchase homes to pay a minimum of 40% down on new homes. Mortgage amounts can be for no more than 60% of the appraised value -- which must be equal to or lower than purchase price.

 

For those buying second homes, the mortgage interest rate carries a 10% premium.

 

In some areas property prices have started to fall, but the government says they expect to see prices start to lower by Q1 2008. If they do not, further measures will be taken to reduce financing and development of new housing units.

Did I just come under the wire with my 30/70 loan or do you think I got lucky?

 

Could be either. It does take time for these policies to filter down to smaller towns and villages. In GZ, though, it's 40% without exception.

I will consider it luck and timing and I will be watching to see what happens. Thanks Bill for your valuable knowledge. The complex's office was very busy while I was there. People are buying at a fairly fast rate at this particular complex. I did visit another complex and it did not seem as busy at that time. The other complex was sold out of the smaller homes and only had larger ones that were more than I wanted.

[rogerluli]

China to Freeze Energy Prices in an Effort to Quell Worries About Inflation

 

BEIJING ¡ª Prime Minister Wen Jiabao responded Wednesday to growing public anxiety about inflation by announcing that China would freeze energy prices in the near term, even as international crude oil futures have continued to surge.

 

Inflation has hit an 11-year high in China, and a recent nationwide public opinion survey found that ¡°rising prices of consumer goods¡± ranked as the top public concern, followed by income inequality and corruption.

 

The freezes were announced on the government¡¯s main Web site after Mr. Wen presided over a meeting of the State Council to revise policies on price controls. But the controls are unlikely to get at the causes of China¡¯s inflation ¡ª a currency policy that keeps the yuan artificially low and an overheated economy in which demand for goods and commodities often outstrips supply.

 

Under the new edict, prices of oil products, natural gas and electricity will be frozen in the near term. Rates for public water bills will also be frozen, as will the price of public transportation tickets.

 

The edict also called for stabilizing prices on medical services and for certain agricultural fertilizers. It ordered local governments to monitor prices closely and warned that punishments would be strengthened for those who violate government price-control policies.

 

Ben Simpfendorfer, an economist with the Royal Bank of Scotland in Hong Kong, said the announcement underscored how seriously the State Council regards public attitudes toward inflation.

 

¡°The State Council is worried about public sentiment,¡± he said. ¡°They are worried that rising prices will have a negative impact on sentiment.¡±

 

Last November, China raised gasoline and diesel prices by almost 10 percent, partly to appease officials at state-owned refineries. Refiners had complained that price controls were forcing them to swallow the difference between higher prices for crude oil on the world market and regulated consumer prices at home for refined products. So refineries cut back production of gasoline and particularly diesel, causing long lines at fuel stations around the country.

 

But the November price increase fueled inflation. Consumer prices were 6.9 percent higher in November than a year earlier ¡ª a figure that represented an 11-year high.

 

¡°It was a shock,¡± said Mr. Simpfendorfer, noting that the price increases surpassed the market¡¯s expectations.

 

Oil futures have continued to rise on world markets, briefly surpassing $100, and Chinese refiners are raising the same concerns. With the government unable to suppress market pressures, lines are again forming at service stations, particularly for truckers in southern China.

 

Even Wednesday¡¯s announcement hinted that domestic price increases might be inevitable later this year in response to world markets ¡ª an acknowledgment that might prompt further fuel hoarding in China.

 

¡°Prices of crude oil, grains and other primary products are still rising on the international market, and China faces relatively large pressures of further price increases,¡± the announcement on the government Web site said.

 

For ordinary Chinese citizens, inflation has emerged as a major concern. Last year, food prices rose about 12 percent, causing an often angry public response. More recently, prices for eggs and pork have fallen, though flooding in farming regions of central China damaged vegetable production and kept those prices high, Mr. Simpfendorfer said.

 

Last week, the Chinese Academy of Social Sciences released a national survey that found 30.5 percent of respondents considered inflation the country¡¯s top problem. Stories about the urban poor struggling with rising prices have become common in the Chinese media.

 

China¡¯s rapid economic growth has been fueled by rising demand for oil, coal and other energy sources. This week, China also announced national regulations to help clean up the environment and slow the country¡¯s growing addiction to imported oil by focusing on a ubiquitous but unexpected target: the plastic bag.

 

On Tuesday, the State Council banned production of ultrathin plastic bags and required store owners to charge customers for thicker plastic bags. The move, which takes effect June 1, is intended not only to fight littering, but also to reduce oil use. Chinese media have reported that China uses about three billion plastic bags every day. Creating this many bags requires 37 million barrels of crude oil every year, according to the Web site of China Trade News.

 

¡°Our country consumes a large amount of plastic bags,¡± stated a circular posted Tuesday on the central government¡¯s main Web site. ¡°While convenient for consumers, the bags also lead to a severe waste of resources and environmental pollution.¡±

 

But for all the attention the government has drawn to the bags, their production represents less than a week¡¯s worth of Chinese oil consumption.

[Shenzhen K-1]

China to Freeze Energy Prices in an Effort to Quell Worries About Inflation

 

BEIJING ¡ª Prime Minister Wen Jiabao responded Wednesday to growing public anxiety about inflation by announcing that China would freeze energy prices in the near term, even as international crude oil futures have continued to surge.

 

Inflation has hit an 11-year high in China, and a recent nationwide public opinion survey found that ¡°rising prices of consumer goods¡± ranked as the top public concern, followed by income inequality and corruption.

 

The freezes were announced on the government¡¯s main Web site after Mr. Wen presided over a meeting of the State Council to revise policies on price controls. But the controls are unlikely to get at the causes of China¡¯s inflation ¡ª a currency policy that keeps the yuan artificially low and an overheated economy in which demand for goods and commodities often outstrips supply.

 

Under the new edict, prices of oil products, natural gas and electricity will be frozen in the near term. Rates for public water bills will also be frozen, as will the price of public transportation tickets.

 

The edict also called for stabilizing prices on medical services and for certain agricultural fertilizers. It ordered local governments to monitor prices closely and warned that punishments would be strengthened for those who violate government price-control policies.

 

Ben Simpfendorfer, an economist with the Royal Bank of Scotland in Hong Kong, said the announcement underscored how seriously the State Council regards public attitudes toward inflation.

 

¡°The State Council is worried about public sentiment,¡± he said. ¡°They are worried that rising prices will have a negative impact on sentiment.¡±

 

Last November, China raised gasoline and diesel prices by almost 10 percent, partly to appease officials at state-owned refineries. Refiners had complained that price controls were forcing them to swallow the difference between higher prices for crude oil on the world market and regulated consumer prices at home for refined products. So refineries cut back production of gasoline and particularly diesel, causing long lines at fuel stations around the country.

 

But the November price increase fueled inflation. Consumer prices were 6.9 percent higher in November than a year earlier ¡ª a figure that represented an 11-year high.

 

¡°It was a shock,¡± said Mr. Simpfendorfer, noting that the price increases surpassed the market¡¯s expectations.

 

Oil futures have continued to rise on world markets, briefly surpassing $100, and Chinese refiners are raising the same concerns. With the government unable to suppress market pressures, lines are again forming at service stations, particularly for truckers in southern China.

 

Even Wednesday¡¯s announcement hinted that domestic price increases might be inevitable later this year in response to world markets ¡ª an acknowledgment that might prompt further fuel hoarding in China.

 

¡°Prices of crude oil, grains and other primary products are still rising on the international market, and China faces relatively large pressures of further price increases,¡± the announcement on the government Web site said.

 

For ordinary Chinese citizens, inflation has emerged as a major concern. Last year, food prices rose about 12 percent, causing an often angry public response. More recently, prices for eggs and pork have fallen, though flooding in farming regions of central China damaged vegetable production and kept those prices high, Mr. Simpfendorfer said.

 

Last week, the Chinese Academy of Social Sciences released a national survey that found 30.5 percent of respondents considered inflation the country¡¯s top problem. Stories about the urban poor struggling with rising prices have become common in the Chinese media.

 

China¡¯s rapid economic growth has been fueled by rising demand for oil, coal and other energy sources. This week, China also announced national regulations to help clean up the environment and slow the country¡¯s growing addiction to imported oil by focusing on a ubiquitous but unexpected target: the plastic bag.

 

On Tuesday, the State Council banned production of ultrathin plastic bags and required store owners to charge customers for thicker plastic bags. The move, which takes effect June 1, is intended not only to fight littering, but also to reduce oil use. Chinese media have reported that China uses about three billion plastic bags every day. Creating this many bags requires 37 million barrels of crude oil every year, according to the Web site of China Trade News.

 

¡°Our country consumes a large amount of plastic bags,¡± stated a circular posted Tuesday on the central government¡¯s main Web site. ¡°While convenient for consumers, the bags also lead to a severe waste of resources and environmental pollution.¡±

 

But for all the attention the government has drawn to the bags, their production represents less than a week¡¯s worth of Chinese oil consumption.

 

 

Our driver in Beijing told us that there are over 3 million civilian cars in Beijing alone!! Factor in taxis, police,. combo buses etc. and WOW!!

 

$4.00 a gallon by Memorial Day!!!!!!!!!