Xi Jinping's Speech: "Housing Is For Living Rather Than Speculation"

Tyler Durden's picture

Xi Jinping delivered a three and a half-hour speech at the opening of China’s 19th Party Congress, the once in five years mega-Communist Party gathering (previewed here), to herald a ‘new era’ of power (a term he used 36 times), consolidating his position as perhaps the most influential Chinese leader in decades. While he did lay out  guidelines to develop China in this ‘new era’, bottom line: Heavy in superlatives, light on specifics.

It was the year's most carefully politically-staged global event, best understood by the related trivia gleaned from party officials. The drafting process involves 4,700 individuals, 59 organisations, reports from 25 think tanks, nine research committees and 6 discussion forums, hosted by Xi, to hear suggestions. Xi walked into the Great Hall of the people to marching band music with delegates clapping in time. When highlighted the role of Marxism in 21st century China, he was greeted by lots of applause from delegates.

A room where everyone agrees, and nobody argues. In short: Marxism in action.

Anyway…what about policy, economics and China’s credit bubble?

Obviously, not everything is said explicitly, so we are forced to employ the dark art of interpreting both what’s said and what’s not said. On that note…there has been speculation that Xi will take further action to contain the credit bubble after he’s solidified his own position at the Congress. Xi vowed to continue to work to reduce the debt load and make further capacity cuts. This follows the head of the People's Bank of China, Zhou Xiaochuan’s comment this week that Chinese companies have too much debt. Perhaps the most interesting question is how much significance should be attached to Xi’s comment  "housing is for living rather than speculation''… a soundbite which he reiterated.

Talking of what was not said, there has been some discussion regarding the prominent place given to Jiang Zemin. Some journalists noted that Jiang implemented difficult economic reforms in the 1990s, unlike Xi’s immediate predecessor, who was the architect of the credit boom. Maybe there’s something in it, but it’s very tenuous.

Xi stated that China will “deepen interest rate and exchange rate reform” – which was directionally unhelpful for traders – and will boost the strength of state companies to defend against systemic risks. The Yuan gapped higher as Xi started speaking, but it probably “had to.”

While the Yuan strengthened, the PBoC was undertaking its largest open market operation since 18 September 20177, injecting RMB 270 billion into the financial system. Xi repeated the government’s mantra that (obviously) economic growth is not balanced, or efficient, innovation is poor and the real economy needs to be improved.

There was no reference to economic growth targets, although Xi stated that quality of growth, rather than speed, is the priority. Most commentators are taking this to mean no change to 6.5% annual GDP growth. Maybe... but it’s not certain.

From an overseas perspective, Xi outlined the need to reduce entry barriers for foreign businesses by “large scale”, which made us wonder whether he’s concerned about too little growth going forwards. In a truly bizarre claim, he stated that China wants to “contribute to global ecological security”, and complimented his nation for leading the global debate on climate change. Debating is one thing, we suppose.

Corruption was, unsurprisingly, a major theme in the speech and is the biggest threat for the Communist Party, according to Xi. Having said that, progress has been made "We have taken out tigers, swept flies and hunted down foxes" and the Party will “continue to purify, improve and reform itself.” The Party members were encouraged “resists pleasure seeking, inaction, sloth and problem avoidance.”

In the wake of Brexit and Catalonia, Xi made the veiled threat that “opposing behaviors” must be prevented from “splitting the motherland.'' China would not allow any separation from China’s territory, which obviously includes Taiwan.

The longer-term plan is divided into periods. Between now and 2020, Xi said that China would complete the building of a moderately prosperous society. The realization of socialist modernization will be achieved after 15 years of hard work in 2035, with the “golden era” (our term) of prosperity by 2050. "Socialism with Chinese characteristics is now flying high and proud for all to see." Xi claimed.

Finally, Xi promised that female and ethnic minorities will be elevated in Chinese society, which seemed “prescient” given the observations of Bloomberg’s Pete Martin in the auditorium. “`Twelve women in red coats and four men in black coats fanning out to serve tea on stage -- perfectly synchronized. The four men are serving the leaders in the front row and the 12 women are serving those seated behind them.''

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TheSilentMajority's picture

Only took him 20 years to figure out that "Housing Is For Living Rather Than Speculation".

Arnold's picture

Good luck with that.
100 year mortgages on living space that hasn't been built yet, to give to the grandchildren that aren't born yet.

techpriest's picture

When business is required to dance with the Party, when money is not allowed to go overseas, and when the stock market is a truly rigged game where you can go to jail for selling too much, and inflation will wipe out the 5% interest in a Chinese savings account, how else can you invest but stockpile gold and housing?

Effect, meet cause.

Arnold's picture

Stick with the five year plan, comrade.
Work the five year plan comrade./s

nmewn's picture

Someone better keep an eye on Thomas Freidman when the subject turns to communist China and five year plans.

No potted plant is safe ;-)

Four chan's picture

how is dear leaders housing? the slaves

techpriest's picture

HuffPo said it.
It must be nonsense.
That settles it.

Arnold's picture

http://reason.com/blog/2009/09/09/thomas-l-friedman-china-is-bet

Takes me a while to build relevant links.
nmewn is tough to follow, unless he is ranting.

techpriest's picture

I get you.

Regardless, ZH is not a fan of HuffPo.

Arnold's picture

I am a casual reader of Sun Tzu.

chestergimli's picture

Working on a 5year plan is like having a plan to put some cash behind to save or planning on putting a new roof on, or putting a new bathroom in. A plan doesn't hurt. Otherwise you have chaos.

Ghordius's picture

+1 techpriest

oh, and don't forget the reason to buy a house: the prospect for... a wife

that Chinese future Mother In Law is not going to let you marry her precious girl without a house. or two

techpriest's picture

My MIL let me marry my wife without a house... but I did have a PhD in a field that she thought was good. But it is true - if you cannot demonstrate that you can take care of momma's daughter, the marriage is not happening.

doctor10's picture

he dosn't "get it" ...housing is a simple collateralization tool for a nation's creditors...and when a nation is completely in hock-debt to GDP >100% -you lose control of your nation to those creditors/bankerz attempting to conserve their collateral.  When that happens the peons and peasants start to lose whatever "freedoms" they have enjoyed to the bankerz insecurities regarding their extended credit. The politicians in between either facilitate the process -think HRC types-or get in the way...think JFK types.

Escrava Isaura's picture

Darn’t.

You got the very first and the very last (Kennedy) statements wrong.

First: Jinping made that statement because he gets.

Last: Executive Order 11110 issued by Kennedy on June 4, 1963.

The order allowed the Secretary to issue silver certificates, if any were needed, during the transition period under President Kennedy's plan to eliminate Silver Certificates and use Federal Reserve Notes.

https://en.wikipedia.org/wiki/Executive_Order_11110

 

Mimir's picture

It seems to me, that in the Western World we still havn't figured that out. 

LightBeamCowboy's picture

I've been saying for 30 years that unrestricted use of real estate as an investment medium would have pernicious effects, especially on housing for low-income people. The irony with Xi mentioning this is the degree to which Chinese hot money is fueling RE speculation around the world, but particularly on the west coast of North America. However, as a liberty-minded person, I've never been able to dream up a policy solution for this problem that didn't smack of, well, Communism.

DEMIZEN's picture

it took a communist party congress to reveal some medieval common sense. still, light years ahead of dustbowl fliponomics

SilverRhino's picture

Pipe dreams and snake oil.  

 

Get ready for more war.

BritBob's picture

Ah politics and reality - really two different things.

China – Argentina – the Falklands

In tune with Macri's words, Xi Jinping thanked Argentina "the support they have given us for our claim of a single China as we support theirs for the Falkland Islands."  (Telam 17 May 2017)

Suppose China didn't take territory in the 19th century?

Falkland Islands – The Usurpation (1 pg): https://www.academia.edu/34838377/Falkland_Islands_The_Usurpation

 

Golden Showers's picture

Niggers in China.

China has come a long way, baby.

We're gonna elevate you and re-educate everyone else because I'm a little dick chinese businessman politbureau sellout faggot who doesn't give a fuck about the fact that there's hundreds of Chinese pyramids and lots of caucasian Chinese and we fucking destroyed Tibet and faked the Dali Lama but now we're going to completely fuck everything and elevate minorities in China because we're hypocrites.

Chinese people are selective, racist ignorant retards on high and the coolest motherfuckers you'd ever want to play Dungeons and Dragons with at home.

Little Chinese commie murdering life hating liars are pretending to be human. Totally amazing.

What about Tienamin Square then you fucking lying scumbags?

Go do a favor for the world and leave China to the Chinese instead of throttling it with your murderous psycopathic bullshit and walk the earth. Oh, you can't do that because you are weak, cowardly children sucking the tits of your whore master just like the good Chinese do to you.

Shame what a wast of 1.5 billion losers does to this planet. All the rest of your defecting real people can't even say half what I just did.

Fuck you China. You are murderers.

Arnold's picture

Still, I believe much of the hubris of the leadership is they try to keep up with the neighbors, Hong Kong and Taiwan.

Grimaldus's picture

They are gonna invade Taiwan.

Lot's of people are going to die.

Communist Party power is far moar important than millions of peasant slave lives.

Twisted, sick psycopath does not even come close to covering these guys.

Murderers, yes.

 

 

 

 

 

 

Grimaldus

Redneck Makin-tosh's picture

Sounds a bit like my marriiage - whatever Xi says is correct.

I'll bet there is a subroutine in China's legal robots that says pretty much the same thing.

Arnold's picture

Beyond the surface pomp, it reminds me of our current governance.
You know every one of those claps means a chance to slit Xi's throat for more behind the curtain power.
"Good thing we have such an Idiot as a figurehead."

Redneck Makin-tosh's picture

Lol/Sorry, I meant these robots - not the party faithful !

http://www.zerohedge.com/news/2017-10-17/yes-robot-lawyers-are-now-thing

Did you mean "idiot"?

new game's picture

humans suck, the majority that is...

ssm

Last of the Middle Class's picture

As he checks his bitcoin wallet for the current balance after flipping million dollar condos in Hong Kong.

bitplayer's picture

"Cats are for eating rather than petting!" Xi continued, to thunderous applause.

Byrond's picture

Maybe we can compromise and make everyone including the cats happy. Cats are for licking, not cooking.

Pliskin's picture

Pussies are for licking....

FIFY

yvhmer's picture

I hoped you had said pussies ...

house biscuit's picture

You worse-than-useless piece of shit

What, your little monosynaptic brain couldn't resist the reflex to be neither original nor clever

Clever posts should be left untainted

Byrond's picture

"I like power. Give me more! And pollution too! More plastic garbage for everyone!"

Batman11's picture

Don't you want to blow up your economy like Australia, Canada, Greece, Ireland, Norway, Spain, Sweden, the UK and US?

All the idiots are doing it.

The real idiots, like the US, leverage it up with derivatives.

Byrond's picture

Trump should suddenly shut down Walmart and Amazon for one month just to demonstrate China's dependency. But maybe Americans would realize that they're not dependent. What then? 

Bigly's picture

PURIFY, reform....

Hmm. How they going to do that? ;)

Byrond's picture

EMP the US, then bulldoze Facebook, then take over Hollywood?

Byrond's picture

By 2050 we'll have entirely destroyed the environment, and this will usher in a golden age for the 10,000 remaining humans who live in Alaska, which will be a tropical paradise. 

Byrond's picture

I don't like it either, so I'll take the dislikes as agreement. 

Debugas's picture

any word on Silk Road project ?

Ghordius's picture

no need, it's going on and on

LightBeamCowboy's picture

Trump will get some schooling on infrastructure investment during his visit to China in three weeks. Too bad when he gets home someone will have to tell him that the money for the Prudhoe Bay to Tierra del Fuego high-speed railway already got spent by the Shrub and Obummer on wars for Israel.

TheytookERjobs's picture

The Chinese are compulsive gamblers. Im sure they will listen to him

My crotch itches's picture

"housing is for living rather than speculation''

He is right, you know...

To Hell In A Handbasket's picture

Xi Jinping is spot on, but this level of intellect will place you on the crazy list. Westerners have taken for granted the madness that home values are meant to rise for ever and ever, where wealth can be extracted. Blame neoliberalism, neoclassical economics and the Chicago school in particular.

My parents London inner city house was valued at £3.7 million this year. My mum and dad purchased it in 1981 for £29K, when Paddington had a large Afro-Caribbean community. The area has gentrified beyond belief in the last 25 years. Even the council estates have gone upmarket. My mum is the definition of property rich, but cash poor. 

 

Byrond's picture

Your mum has a little over one week to cash out. Or she'll just be Charles Dickens poor. 

techpriest's picture

Sounds like an opportunity to bail out and move in a place with a reasonable cost of living.