About China - open research in progress

[Hehe]

Why this post?
After so many days reading about TRE, I set myself out to research a little bit about China and its effect to help us, investors outside of China to better adjust our investment.

I have a relative who basically lost as much as a shiny new BMW overnight in this event and I want to do a little bit to help her to invest more wisely in the future. I want to do this via a public forum because I think other people's idea could help me minimize the possibility of any oversight and I'm sure there are many capable individuals here that could assist me on this research, which I'd TIA.

Everyone is welcome to participate and give their 0.02 to better shape this research and I would try to update daily on my new findings and thoughts.

Disclosure & Disclaimer
First of all, I'd do some disclosure. I am a Taiwanese immigrant who currently hold no assets/investments related directly to any Chinese company and have no plan on starting any position in the foreseeable future. If anything changes, I'd update here.

And take this research as my personal work and opinion. Any recommendation done/will do are based solely on my knowledge and no one, including myself, shall take any responsibility for losses based on the opinion expressed. Quotes are welcome as long as they are clearly credited/sourced.

As for the grammatical stuff, English is not my first language so bear with me if my grammar/spelling/punctuations are not 100% correct. I would do my best to have them as accurate as possible though.

Hypothesis
Due to several concerns over China's problems, investors should be cautious when investing into assets related with China as it might go belly up.

China could be in a lot of problems that we don't know until it is too late to react.

[Hehe]

So what the !@#$ does China have to do with me?
China is currently the second largest economy in the world and with the explosion in its development, they created a lot of liquidity in funds and are buying assets everywhere.

Today in Vancouver, London, Australia... etc we hear the notion that Chinese buyers are buying like crazy driving up property prices. Assuming such idea is in fact true, local people like us are those to take their messes should anything happen to them.

Therefore, it's important to understand about China before making an investment decision that relates to China more directly.

I will start my research on local level focusing on real estate and then develop my way into stock market and resources.

So, Real Estate first
Vancouver real estate has been booming for most of the last decade thanks to a big inflow of foreign immigrants/investors.

We already know what they can do by coming in, let's talk a little bit about what would happen if they go out.

Construction accounts about 50% of BC's GDP. So it's a big chunk of our economy.

Now, speculation is a major force that drive the prices of RE. If Chinese buyers (which according to rumors, as I couldn't find any official stats, takes up as much as 40% of residential deals) stop buying all of sudden, the possibility of a house market correction could happen to Vancouver and it ain't pretty.

To be continued... too much info to digest through.

[Hehe]

Reserve for stock market

[Hehe]

Reserve for resource market

[Nssan]

Originally Posted by Hehe

So what the !@#$ does China have to do with me?
China is currently the second largest economy in the world and with the explosion in its development, they created a lot of liquidity in funds and are buying assets everywhere.

Today in Vancouver, London, Australia... etc we hear the notion that Chinese buyers are buying like crazy driving up property prices. Assuming such idea is in fact true, local people like us are those to take their messes should anything happen to them.

Therefore, it's important to understand about China before making an investment decision that relates to China more directly.

I will start my research on local level focusing on real estate and then develop my way into stock market and resources.

So, Real Estate first
Vancouver real estate has been booming for most of the last decade thanks to a big inflow of foreign immigrants/investors.

We already know what they can do by coming in, let's talk a little bit about what would happen if they go out.

Construction accounts about 50% of BC's GDP. So it's a big chunk of our economy.

Now, speculation is a major force that drive the prices of RE. If Chinese buyers (which according to rumors, as I couldn't find any official stats, takes up as much as 40% of residential deals) stop buying all of sudden, the possibility of a house market correction could happen to Vancouver and it ain't pretty.

To be continued... too much info to digest through.

Coincidentally, I was reading an article this morning for the Globe and Mail stating that Chinese oversea buyers don't actually amount to that much of the current real estate transactions. The data from many sources that have been collected only knows what ethnicity those buyers were from their names. Thus, they don't necessarily have any concrete information if those 'Asian' buyers are permanent residents, citizens, or foreign nationals. So, any influx of investment from foreign nationals will not only do good for our economy but, adds value to Vancouver's image as a city to be sought after.

Source: http://www.theglobeandmail.com/repor...rticle2072241/