China update

Sweden Is Planning To Offer Every Schoolchild Chinese Classes In The Next 10 Years

China’s $1 Trillion Debt Seen Toxic as Cities Value Land at Winnetka Level

Workers toil by night lights with hoes, carving out the signs for Olympic rings in front of an unfinished 30,000-seat stadium, bulb-shaped gymnasium and swimming complex in a little-known Chinese city.
Loudi, home to 4 million people in Chairman Mao Zedong’s home province of Hunan, is paying for the project with 1.2 billion yuan ($185 million) in bonds, guaranteed by land valued at $1.5 million an acre. That’s about the same as prices in Winnetka, a Chicago suburb that is one of the richest U.S. towns, where the average household earns more than $250,000 a year.
In Loudi, people take home $2,323 annually and there are no Olympics here on any calendar.
“The debt isn’t a problem as Loudi is not a developed place,” Yang Haibo, an official at the city’s financing vehicle, says as he sits with colleagues in a smoke-filled meeting room under a No Smoking sign. “It’s an emerging city.”
A 3,300-mile (5,310-kilometer) tour of three cities in China, coupled with reviews of dozens of Chinese-language bond prospectuses that offer an unusually transparent view into local government debt, shows just how widespread such borrowing has become. In China, as in the U.S. before the collapse of the subprime mortgage market in 2007, local debt is backed by collateral that is overvalued, may be hard to sell and, in some cases, doesn’t exist.
Officials in Loudi, whose colonnaded government building is locally nicknamed the White House, value their 18 tracts of land at almost four times what a similar plot sold for in May. In the northeast city of Cangzhou, the man in charge of the assets financing a port expansion can’t locate the land his company posted as collateral for a 1 billion-yuan bond sale. And a spending spree in Yichun, a district on the Russian border covered by ice much of the year, is backed by promises of future land sales that officials acknowledge may never materialize.

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“It’s a huge myth that land sales are going to be able to even support the interest payments let alone the principal payments,” says Stephen Green, the Hong Kong-based head of Greater China research at Standard Chartered Plc. (STAN) His research team assumes that at least 4-6 trillion yuan of local government loans -- and possibly much more -- will ultimately not be repaid by the projects, Green wrote in a June 29 report on China’s debt.

China May Sustain 9% Growth Pace for 2011 With Investment Moving Inland

Corn Imports by China Seen Doubling to Cool Fastest Inflation Since 2008

Drought and dwindling arable land in China curbed growth in supplies of the grain also used for sweeteners and starch as urban incomes more than tripled in the past decade.
Farmland shrank by 8.33 million hectares (20.6 million acres) in the past 12 years, said Premier Wen Jiabao’s top agriculture adviser Chen Xiwen in March. Land under cultivation has dropped almost to the government’s 120 million hectare limit as new apartments and factories eroded supply and farmers were attracted by jobs in the city.

China Home Sales Jump 31% as Homebuyers Defy Curbs Aimed at Cooling Market

BYD Shares Fall After Carmaker Predicts First-Half Profit May Decline 95%

The Boom Is Still On, As China Home Sales Up 31% This Month

China’s Other Revolution

Those who doubt that profound change and harsh repression can coexist in China should look to the history of South Korea and Taiwan. In January 1987, just seven years after a democratic uprising was crushed in the South Korean city of Gwangju and a few months before the military-backed regime would yield to popular demands for open elections, student protestors were being summarily rounded up by the police. At least one of the students died during interrogation. That same year Taiwan’s Kuomintang government announced the end of 38 years of martial law, a key step toward the establishment of democracy there. But in the months before the announcement, dissenters were still being shipped off, often by secretive military tribunals, to the notorious gulag on Green Island. Crackdowns on opponents, extrajudicial detentions, and violence are often the last-ditch efforts of authoritarian regimes.

China Shut Down 1.3 Million Websites Last Year

Final Segments For San Francisco Bay Bridge Are Ready To Ship—From Shanghai

The Incredible Story Of How Yum! Brands Took Over China

And Now One Of America's Biggest Creditors Is Getting Nervous

Why A Chinese Hard Landing May Be Closer Than You Think

China tries to put brakes on overheated economy. How well China succeeds in slowing its economy without triggering a slump holds enormous consequences for the rest of the world economy.

Chinese Government Increasingly Fretting Over Home Prices In Lower-Tier Cities

Foreign Direct Investment In China Slows

To Go With All That Meat, China Is Importing Unprecedented Amounts Of Cheese

China Is Already Scared Of QE3, And Is Blaming The US For Its Inflation mess

Why China's Growth May Slow

Proof Of A Big Chinese Housing Bubble As Far Back As 2008

A Few Reasons Why China Has Even Less Energy Security Than America

China Plans to Release Some of Its Pork Stockpile to Hold Down Prices