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Ann Lee vs Peter Navarro and CNBC on China Real-estate ‘Bubble’

Allen and I had a chance to chat with Professor Ann Lee a little over a year ago, and we continue to see her moderating the warped perspectives in the Anglophone press. In this short CNBC video, she debunks Professor Peter Navarro of UC Irvine. Actually, she’s mostly debunking CNBC’s narrative. China’s urbanization rate is still only about 52%. When China’s industrialization finishes, about 1 billion people would have moved. Demand for urban housing is astronomical in China this day in age. As Lee says, China is implementing various policies to curb escalating real-estate prices. Allen often like to say – this is an economics issue, but as you see in the narrative below from CNBC’s reporter and Peter Navarro, this issue sounds ominous and political doesn’t it? Kudos to Lee for sticking to her points which we wholeheartedly agree with.

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  1. Zack
    March 12th, 2013 at 02:43 | #1

    the Chinese ‘housing bubble’?! that old stick?
    man, it must be a slow news day.

    Do we really have to go into the background details about how it’s the (failed) White House policies of quantitative easing (QE) that’s pumping up the Chinese real estate “bubble”? all that hot (and declining in value) money, printed from the Fed pouring into high interest assets of developing economies, such as China.
    And given that even after no less than four rounds of QE, the US economy is still anaemic (because the money that’s supposed to go into the US economy is going to developing economies with higher rates of return), and countries like China, Germany etc have had to shield themselves from all that pouring of hot money.

    Or do we have to go into the fact that the White House is only printing money because it’s hoping to dilute the debt it owed on Treasuries ie cheating foreign holders of US Treasuries (like the Chinese) as well as a glaring example of the failure of Keynsian economics (promoted no less by the charlatan and Nobel Prize Winner in ‘economics’, Paul Krugman) in the United States.

    In any case, China appears well prepared for this new round of what can be construed as economic warfare, as Yi Gang, Deputy director of the Central Bank said, China is ‘ready’ for the currency war. Isn’t it strange how honourless japan etc and some of the G-20 nations are, considering they pledged not to indulge in such ‘beggar thy neighbour’ currency wars.

  2. Raphael
    March 12th, 2013 at 03:56 | #2

    Wow, Navarro had about as much class as Bill O’Reilly. And he’s looks so ugly and simian to boot (not that that has any bearing on his arguments – his own ignorance does enough to discredit them). Does anyone else here feel reassured by typical China-haters like Navarro or Gordon Chang? If these are the only batters that the China-haters side can field, i.e. pathological Sinophobes who can never, despite their best efforts, produce anything of substance to show how China is fucking up, then that means China is golden and it’s all smooth sailing from here.

  3. Black Pheonix
    March 12th, 2013 at 07:42 | #3

    He’s been running for elections all over the place, and couldn’t win.

    Obviously, he couldn’t convince even the fickle voters.

    Just another policy hack out to make a buck from his trashy books and movies. Look out Custer, some one has already cornered your film market in US.

  4. Zack
    March 12th, 2013 at 12:48 | #4

    gordon chang is in a class of his own; apparently, he’s divorced himself from this reality and basic mathematics and logic and is still living in the 90s where his theory that ‘china would collapse by 2003’ was widely believed. Now he’s just a sad individual with daddy issues who Forbes keeps around because Americans need that shallow false consolation that someday, someday, maybe tomorrow, or the day after, or a decade after, China will fall and America will live happily ever after.

    y’know what the funny thing about racial discrimination is? most people learn to grow stronger from it and lead balanced and fulfilling lives? Gordon Chang on the other hand perhaps feels the need to trash on China as a way of vindicating his rejection of his Chinese heritage (his father is from Taiwan, China) and hoping that he’ll be more accepted in white american culture if he somehow proves his anti-chineseness.

  5. Black Pheonix
    March 12th, 2013 at 14:45 | #5

    Gordon Chang and some of the “dissidents” have adopted the philosophical approach that China essentially has nothing useful to offer to the World, and all Chinese values and identities should be destroyed in order to remake China.

    (Oddly, that’s occasionally what they accused the Chinese government of doing in the Cultural Revolution).

    I guess there is always going to be such “House Coolies” hoping to live well by kissing ass to those eager to use them to impose “new ideas” on China.

    Too bad there are always too many Chinese in the World. 1.3 billion Chinese don’t fall for that kind of gag.

  6. Zack
    March 12th, 2013 at 15:52 | #6

    @Black Pheonix
    aye, very good points, blackphoenix.
    and speaking of such ‘house coolies’, it is with great disappointment that i’ve observed a growing strain of ‘house coolie’ mentality from the likes of Lee Kuan Yew, the founder and ‘king’ of Singapore who vocally calls for the US to act as a ‘counterbalance’ to China. This is the sort of disloyalty that comes out when some Chinese people are convinced by their colonial white masters (in singapore’s case, the British and Americans) that they’re better than the rest of the other Asian nations. i honestly believe this is the root of the arrogance of singaporeans i’ve had the misfortune of encountering.
    But in all fairness to Lee Kuan Yew, he’s an old man and he’s been a witness to China’s transition, though it doesn’t excuse his inability to differentiate between the China of the 1960s and China of now, just as it doesn’t excuse Gordon Chang’s inability to comprehend facts and basic logic.

    Typically, those who want to destroy traditional Chinese values in lieu of western values and ideas have what i call the ‘Filipino model’ in mind. With the Philippines, you have a christianised (ie the traditional values have been replaced by western catholic values) society that is ultimately servile to the interests of the Western nations, where corruption goes unchecked and filipinos exit the country to serve as, well, servants for the western nations, and cannon fodder for Western imperialism. Think of the ghurkhas and the british empire in that context.

  7. Charles Liu
    March 12th, 2013 at 16:07 | #7

    @Zack

    The problem with the China housing bubble doomsayers like Navarro, is that they are ignoring market differences and the fact conditions lead to the housing meltdown in US simply do not exist in China – from financial deregulation and lack of oversight in derivatives market, down to modes of purchase and speculation by Chinese investors and homeowners.

    That’s not to say China’s enormous real estate sector doesn’t have any losers. What our media tend to focus on to make the case are completely anecdotal – a joint project by Singaporean developer mired in lawsuit after foundation sank is proof Pudong is “ghost city”; a brand new urbanization project in Inner Mongolia where sheep outnumbers people is representative of China as a whole; an empty mall in Shenzhen means China’s retail real estate is in trouble (never mind Shenzhen had grown to 10 million people and added a subway line every year in the last 5 years).

    The supposed ghost city Times reported on 3 years ago, Zhengzhou East New District, is now full of people and nobody is interested in doing a follow-up. Had our media being state-sponsored, would this story be reported any differently?

    http://jx.zjol.com.cn/05jx/system/2012/02/07/018181136.shtml

  8. Zack
    March 12th, 2013 at 16:24 | #8

    @Charles Liu
    hi Charles, fantastic points.
    i’d say that western media being inadvertantly state sponsored (via kickbacks from politicians and private individuals eg ted turner and murdoch) need to show these exceptional instances of losers of the Chinese property market because if their viewership were to turn that all critical eye inward and see the shoddy state of their own country’s real estate, they’d be tempted to ask some rather uncomfortable question and raise a fuss and basically go all Occupy on the American Elite/British Elite.

    Besides, my only sympathies with respect to the defusing Chinese housing bubble (because central bank policy has always been to defuse the real estate market) are to the Chinese families who’ve invested their life savings into their own homes or homes of relatives.
    i have absolutely no sympathy for hedge fund investors who pumped all that hot money into China’s real estate sector and are now losing money.

    Speaking of which, only an idiot totally devoid of critical analytical faculties (as expressed by folks like Navarro and CNBC, and people who’ve placed bets against China’s economy like Roubini and therefore stand to make millions in the case of negative growth) would even dream of likening/comparing China’s real estate ‘bubble’ to the US housing market. I don’t see CDOs or toxic debt or Chinese banks giving loans willy nilly to every tom, dick and harry yet these idiots stand by their dogma (for it is dogma, without which, they’d be revealed for the charlatans that they are) because all gain from a good ‘china in decline’ story.

  9. Charles Liu
    March 12th, 2013 at 17:18 | #9

    @Zack

    That’s another difference. The 30% down apartments Chinese families bought thru savings, even if they don’t go up, they’ll still be able to live in them, or put them up as rental property while the market catch up.

    Compare this with US, where the middle-class homeowners were baggared, their equity extracted by a flawed system that resulted in tremendious concentration of wealth by the wealthy elites, almost in a criminal way.

    http://blog.hiddenharmonies.org/2013/03/a-powerful-infographic-of-americas-inequality-perception-gap/

    So who’s the real plutocracy here?

  10. Zack
    March 12th, 2013 at 20:11 | #10

    @Charles Liu
    the fact that the modern USA is a plutocracy explains everything; the wars it fights so as to enrich its very members and the constant warfare every decade or so in order to maintain power via keeping the public fearful and in check. It also explains the massive PR campaign against socialism of any sort or organised egalitarianism. That video yinyang put up last week concerning the stark differences between American individual perceptions of the wealth gap, and the gaping reality of the wealth gap, demonstrates that it is the USG, with approval rating in the 50% area that must be pressured to change, rather than China with its 80%+ approval rating.

    Even the inbred authors of The Economist acknowledge, in spite of their attempts at demonisation and spin, that China is doing much much better than either the pillars of anglo finance: the UK and US.

  11. Zack
    March 12th, 2013 at 20:54 | #11

    Roubini: let’s hear the comment from Beijing
    Lee: …i’m not in Beijing, i’m in New York…
    Roubini: yeah…well..figuratively

    Roubini is clearly grasping at straws, when he has to resort to insinuating that Lee’s ethnicity as a Chinese American is somehow in cahoots with Beijing.
    Isn’t it interesting as Lee qualifies her views with examples and evidence, Roubini offers us….nothing. Nothing but his stupid book which he attempts to spruik.
    Furthermore, he doesn’t even have the common decency to, oh i don’t know, debate, rather than shout on top of Lee. This is really unacceptable and if he’s truly what UC Irvine’s Economic faculty represents, i’d be pretty ashamed to be associated with that.

  12. March 13th, 2013 at 07:20 | #12

    So to summarize Navarro’s argument:

    “Bubble! You’re going to lose money!”

    “la la la la la… I’m not listening… la la la la… BS… la la la!”

    EDIT: oh by the way, apparently this is what the pinnacle of western free press represents: meaningless shouting matches that bring ZERO value to the audience. I’ll take my CCTV ‘propaganda’ any time of the day over this Jerry Springer-like trash.

    EDIT #2: If Navarro pulled that little snide “Beijing propaganda” BS on me, the most appropriate comeback would be “That’s right, listen up & learn something useful for a change.”

  13. Charles Liu
    March 13th, 2013 at 08:20 | #13

    @Mister Unknown

    Don’t forget “Chinese-Americans are genetically disloyal”.

  14. Zack
    March 16th, 2013 at 05:12 | #14

    oh right, before i forget, anyone remember how gordon chang ‘predicted’ China would collapse by 2003, and then he changed it to 2011?
    Well, Mr Chang, it’s now 2013, and we’ve yet to see this much promised ‘China Collapse’. I have however, seen evidence of ‘the coming collapse of the USA’ especially with sequestration biting in amidst OWS activists.

    If ever there was a clear cut example of the urgency for greater media regulation in the West, this would be it. The sacrifice of facts and reason for the likes of charlatans and broken records without a shred of reliability for the sake of kowtowing to the ‘market’ of american angst-angst, which i might add will self perpetuate and may potentially lead to cool, cold or hot wars.

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