70 percent of Chinese millennials are now said to own their home - leading global home ownership

[MultaniGuy]

I heard China is fast losing its farmlands (water and desertification) and farmers (rapid urbanisation) and are so literally colonising the earth not only for minerals but for a steady supply of food for its population. Buying huge tracts of farmland in other countries.

Is this sustainable in times of war or when and if peace breaks down and there is social anarchy.

Will the Chinese not be staring at famine then?

The Americans and Russians still preserved their farmlands. In fact they continue to be anond the world's top producers

I would like to hear from our Chinese on this.

Indian jealous of Chinese accomplishments. lol.

 

[TaiShang]

Of course, ability to buy home and quickly move out of the parent's home is creating home "empty nest" issues.

***

'Empty-nest' youths in China exceed 20 million
CNTV | Updated: 2017-04-11 09:44


China has over 20 million "empty-nest" youths aged 20 to 39, and most of them live in major cities, according to a report by China National Radio (CNR).

Beijing, Shenzhen, Shanghai and Guangzhou are home to the biggest number of empty-nesters. They are young singles who live alone to work usually in cities.

People with "empty-nest" syndrome used to refer mainly to the elderly whose children have moved out from their homes. The term's definition has been stretched in China as more young folk live alone away from their hometowns.

These young empty-nesters are often perceived as shut-ins who prefer to spend most of their time in their apartments. Their main way of interacting with others outside of work is through social media.

China's loners a cause for concern?

Data from the National Bureau of Statistics show 12.45 percent of households in the country were inhabited by one person each in 2015, up by over four percentage points from 2008.

Sichuan University sociology professor Wang Yimei, speaking to Xinhua, said the growing number of empty-nesters was a result of uneven social and economic development between big cities and small towns.

"Empty-nest" just a label

Cao Fang, a 29-year-old in Beijing, bristled at the empty-nest label. "Sometimes, I go for dinner or shop with my colleagues," She also spends plenty of days at home reading. "I've lived like this for four years. I haven't found it unbearable."

According to data from online food delivery service Baidu Waimai, young people living alone have more money to spend on better food and clothes.

"For the young people who have just graduated and aren't married, it's ordinary," said Dong Haijun, professor of sociology at the Central South University.

"They will have their own social hubs, which will not be bound by those of their parents," Dong said.

A young man enjoys his dinner for one in Beijing.[Photo/CNR]

 

[Dungeness]

I heard China is fast losing its farmlands (water and desertification) and farmers (rapid urbanisation) and are so literally colonising the earth not only for minerals but for a steady supply of food for its population. Buying huge tracts of farmland in other countries.

Is this sustainable in times of war or when and if peace breaks down and there is social anarchy.

Will the Chinese not be staring at famine then?

The Americans and Russians still preserved their farmlands. In fact they continue to be anond the world's top producers

I would like to hear from our Chinese on this.

Google Red Line of 1.8 billion Mu, and you will find your answer. Here is one:

China sets new goal for farmland conservation
Updated: Jun 24,2016 4:37 PM Xinhua

BEIJING — China must retain at least 1.865 billion mu (124.33 million hectares) of farmland in 2020, under a new target set by the Ministry of Land and Resources (MLR).

The figure is down from the 2 billion mu registered at the end of 2015, but still above a government red line of 1.8 billion mu.

The ministry vowed in a new plan that China will be strict in protecting farmland and using land economically.

Farmers account for about half of China’s population and food security is still a major issue.

The country has a shortfall of 9.9 million tonnes in the amount of grain it produces and consumes annually despite its total grain output having increased for 12 years in a row, the head of the State Administration of Grain said in April.

In 2015, around 4.5 million mu of arable land was lost to construction, disasters, environmental protection measures and agricultural restructuring, while 3.5 million mu of new farmland was created, MLR data showed in April.

http://english.gov.cn/state_council/ministries/2016/06/24/content_281475378944434.htm

 

[Shardul.....the lion]

Good work appreciated..
Housing (shelter) is one of the basic rights along with food and water...

 

[padamchen]

Google Red Line of 1.8 billion Mu, and you will find your answer. Here is one:

China sets new goal for farmland conservation
Updated: Jun 24,2016 4:37 PM Xinhua

BEIJING — China must retain at least 1.865 billion mu (124.33 million hectares) of farmland in 2020, under a new target set by the Ministry of Land and Resources (MLR).

The figure is down from the 2 billion mu registered at the end of 2015, but still above a government red line of 1.8 billion mu.

The ministry vowed in a new plan that China will be strict in protecting farmland and using land economically.

Farmers account for about half of China’s population and food security is still a major issue.

The country has a shortfall of 9.9 million tonnes in the amount of grain it produces and consumes annually despite its total grain output having increased for 12 years in a row, the head of the State Administration of Grain said in April.

In 2015, around 4.5 million mu of arable land was lost to construction, disasters, environmental protection measures and agricultural restructuring, while 3.5 million mu of new farmland was created, MLR data showed in April.

http://english.gov.cn/state_council/ministries/2016/06/24/content_281475378944434.htm

So in 2015 China lost another million mu of arable land.

And China has a significant food grain shortfall. Even with output increasing year on year.

This can only point to land under cultivation being inadequate for the growing population, in spite of better farming techniques and grain strains.

Why should this be happening in a country with a huge land area, large river systems, and most importantly, a large chunk of humanity to feed.

 

[Dungeness]

So in 2015 China lost another million mu of arable land.

And China has a significant food grain shortfall. Even with output increasing year on year.

This can only point to land under cultivation being inadequate for the growing population, in spite of better farming techniques and grain strains.

Why should this be happening in a country with a huge land area, large river systems, and most importantly, a large chunk of humanity to feed.

Very simple reason, Chinese per capital consumption of grain, vegetable/fruits, meat products are very high by developing country standard. For example, Chinese eat roughly 15 times more meat products than Indian, and it takes a lot of land to feed farm animals.

 

[Dungeness]

For those who are wondering how Chinese can afford ultra expensive housing without taking out mortgages, here is an good article from Forbes:


How People In China Afford Their Outrageously Expensive Homes

Luxury apartments in Xiamen. Image: Wade Shepard.

I was surprised when the owner of the run-down, 82 square meter apartment outside of the core downtown area of Xiamen that I once rented told me that he was selling it for nearly US$300,000. The apartment was in a well-worn 15 year old building -- old in a country where housing only lasts for 25-30 years -- and had grime covering the walls, tiles from the kitchen floor that were peeling up, water oozing up from the shower drain, and fixtures that were all mismatched . . . and dilapidated at that. Although at 22,000 RMB per square meter I couldn't say that this place was priced abnormally high -- this is just what people pay for homes in the east of China.

An average 80 square meter apartment within Shanghai's Inner Ring Road goes for upwards $886,000; while in the city's hinterlands it sells for around US$200,000. In Beijing, the average cost of a home of this size is roughly US$310,000. This is all in a country were $5 can get you a bulging armful of food from the local market and $70 gets you a bunk on a train that’s going all the way across the country.

According to the IMF ’s house price-to-wage ratio, China has seven of the world’s top ten most expensive cities for residential property. All through the country's tier-one, tier-two, and even some tier-three cities, housing prices are severely out of proportion with the incomes of the people who live there.

In Xiamen, a coastal city with a perpetually hot property market, $300,000 for an apartment is normal -- even though the minimum wage there is hardly $200 per month and the average wage is around $1,000. Even for the city's middle class residents, who make between $1,200 and $5,000 per month, the price seemed prohibitively high.

However, the people of China can afford to buy these extremely expensive properties. In fact, 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. On top of this, north of 20% of urban households own more than one home, according to Nomura . So with wages so out of whack with real estate prices, how can so many people afford to buy so many houses?

Before we can understand how people in China can afford to frolic in their country’s over-inflated housing market, we must look at where this market came from. Hardly 20 years ago China’s real estate market didn’t exist. It wasn’t until the mid-90s that a series of reforms allowed urban residents to own and sell real estate. People were then given the option to purchase their previously government-owned homes at extremely favorable rates, and most of them made the transition to being property owners. Now with a population provisioned with houses that they could sell at their discretion and the ability to buy homes of their choice, China’s real estate market was set to boom. By 2010, a little over a decade later, it would be the largest such market in the world.

When we talk about how people afford houses in China today, more often than not we’re not talking about individuals going out and buying property on their own — as is the general modus operandi in the West. No, we’re talking about entire familial and friend networks who financially assist each other in the pursuit of housing.

At the inner-circle of this social network is often the home buyer’s parents. When a young individual strikes out on their own, lands a decent job, and begins looking to pursue marriage, getting a house is often an essential part of the conversation. Owning a home is virtually a social necessity for an adult in China, and is often a major part of the criteria for evaluating a potential spouse. As parents tend to move into their children’s homes in old age, this truly is a multi-generational affair. So parents will often fork over a large portion of their savings to provision their children with an adequate house -- oftentimes buying it years in advance. If parents are not financially able to buy their kids a house outright, they will generally help with the down payment, or at the very least provide access to their social network to borrow the required funds.

Take for example the case of Ye Qiuqin, a resident of Ordos Kangbashi who owns two houses across the country in Guangdong province, where she is originally from. Together with her fiancé, she makes roughly US$3,200 per month from running a cram school. For her first home she made a down payment of roughly US$20,000; of which $3,300 came from her parents, $10,000 came in the form of loans from her sister and friends, and the rest came from her savings.

To decrease the amount of volatility in China’s often hot property market, there are very strict rules as to how much money people can borrow from the bank for purchasing real estate. Although this slightly varies by city and wavers in response to current economic conditions, for their first home a buyer must lay down a 30% down payment, for the second it’s 60%, and for any property beyond this financing isn’t available. So for people to buy homes in this country they need to step up to the table with a large amount of cash in hand. In fact, 15% of all residential property in China is paid for in full upfront.

Why there is so much liquid cash available for these relatively large down payments is straight forward: the Chinese are some of the best savers in the world. In fact, with a savings rate that equates to 50% of its GDP, China has the third highest such rate in the world. As almost a cultural mandate, the Chinese stash away roughly 30% of their income, which is often called into use for such things as making a down payment on a home — which is the most important financial transaction that many Chinese will ever make.

Another way that Chinese home buyers are able to afford their down payments is via the country’s Housing Provident Fund. This fund began when the country started privatizing urban housing as way to help residents afford to buy their homes. Part of this fund included a government initiated savings plan where employees are given the option to invest a portion of their monthly earnings and have it matched by their employer to assist them with buying a house.

Once the down payment is accounted for, getting mortgages in China is a relatively straight forward affair, and the standards for qualifying are relatively low. For the most part, a borrower’s monthly salary must be at least twice the monthly repayment rate of the loan. Interest rates hover around 6%. On average, those who have these loans will devote between 30% and 50% of their monthly income towards paying them back.

While there is much talk in China and abroad about the increasing number of Chinese home buyers taking out mortgages, relative statistics should quell the hype. Just 18% of Chinese households have mortgages, compared with half of all home owners in the USA. China’s home mortgage-to-GDP ratio was just 15% in 2012, whereas in the USA it was a staggering 81.4%. Although monthly wages in China tend to be relative low, non-performance on mortgages is virtually unheard of -- in 2013 the default rate was a mere 0.17%.

Although we must remember here that China’s banks are fully owned by the Communist Party, and social stability often takes precedence over the raw pursuit of profit, so their lending practices cannot be compared like-for-like against those of Western banks.

Part of China’s boldness when it comes to spending relatively large amounts of money on housing comes from the assumption that wages will continue rising. Nominal income growth in urban China has been going up at a 13% clip annually over the past decade, while annual per-capita disposable income has risen from $1,800 in 2006 to around $4,800 today.

This is to say that the Chinese are able to afford their homes, even though they are extremely expensive.

I'm the author of Ghost Cities of China. I'm currently traveling the New Silk Road doing research for a new book. Follow by RSS.

https://www.forbes.com/sites/wadesh...ir-outrageously-expensive-homes/#3eb8b9d9a3ce

 

[Shotgunner51]

I heard China is fast losing its farmlands (water and desertification) and farmers (rapid urbanisation) and are so literally colonising the earth not only for minerals but for a steady supply of food for its population. Buying huge tracts of farmland in other countries.

Is this sustainable in times of war or when and if peace breaks down and there is social anarchy.

Will the Chinese not be staring at famine then?

The Americans and Russians still preserved their farmlands. In fact they continue to be anond the world's top producers

I would like to hear from our Chinese on this.

That's a good question, food security, and it's always a top agenda in macroscopic management. Like @Dungeness has posted above, central government has land use policy, also has security policies on food crops, like national strategic reserves, fiscal subsidies. Basic war-time food security yes but the government can't do everything in peace time, outside the scope of food crops, say cash crops (cotton), meat/poultry, dairy, fisheries, these are entirely driven by market both domestically and internationally (cross-border trade, outbound investment on farmlands), these are steadily increasing due to change of lifestyle and habits.

 

[Shotgunner51]

In fact, 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. On top of this, north of 20% of urban households own more than one home

People were then given the option to purchase their previously government-owned homes at extremely favorable rates

savings rate that equates to 50% of its GDP, China has the third highest such rate in the world

As almost a cultural mandate, the Chinese stash away roughly 30% of their income

Just 18% of Chinese households have mortgages, compared with half of all home owners in the USA. China’s home mortgage-to-GDP ratio was just 15% in 2012, whereas in the USA it was a staggering 81.4%

Yes, in a summary, household wealth management is very different in China as compared to other nations. It's an unique combination of:

• Low consumption (hence sick low GDP, especially in services sector)
• Ultra high savings (IMO, way too high, it's dragging the economy)
  
• Low household debt (includes mortgage, auto, credit card, student loan, etc)
• Old tradition to own real assets over financial assets
  
• Unique state-private ownership program (分房政策, as you have mentioned above, it's a way to transfer state-owned asset to private sector)

High home ownership among millennials is nothing unusual, their parents can transfer additional houses to them, or pay for new houses on their behalf. Kids between the age 0-18 can own houses in their own names, as long as it's fully paid, no mortgage.

 

[padamchen]

That's a good question, food security, and it's always a top agenda in macroscopic management. Like @Dungeness has posted above, central government has land use policy, also has security policies on food crops, like national strategic reserves, fiscal subsidies. Basic war-time food security yes but the government can't do everything in peace time, outside the scope of food crops, say cash crops (cotton), meat/poultry, dairy, fisheries, these are entirely driven by market both domestically and internationally (cross-border trade, outbound investment on farmlands), these are steadily increasing due to change of lifestyle and habits.

But what about the people?

@Shotgunner51 replying here as my reply there was not allowed because of a 140 word limit.

What I wanted to ask was, we keep hearing of China's massive push for urbanization and industrialization. New cities. Many virtually empty. Huge numbers of rural Chinese (young and middle aged) moving into the cities and urban jobs. The villages and countryside having only the old left behind. Many villages across the country now virtually ghost villages. I read a pretty detailed report on this some time ago and as wondering how a country can live without farming and food production. Or is your technology and robotization of agriculture now at a level that has made human labor and oversight redundant?

 

[Dungeness]

Yes, in a summary, household wealth management is very different in China as compared to other nations. It's an unique combination of:

Low consumption (hence low GDP)
Ultra high savings
Low household debt (includes mortgage, auto, credit card, student loan, etc)
Tradition to own real estates
Unique public-private ownership program (分房政策, as you have mentioned above)​

High home ownership among millennials is nothing unusual, their parents can transfer additional houses to them, or pay for new houses on their behalf. Kids between the age 0-18 can own houses in their own names, as long as it's fully paid, no mortgage.

The absence of real estate tax and inheritance taxes has also encouraged the home ownership in China. Just about everyone I know in China has more than one home, sometimes in different cities. Nobody I know of carries a mortgages, even if they did they usually paid off in 5-10 years. I guess Chinese hate debt, they usually use debit card to pay of cars on the spot.

 

[cnleio]

My viewpoint just different with my Chinese mates, there'r subprime crisis in China and bigger than 2008 U.S ... just the froth not explode yet everything looks very beautiful in China ... Chinese including me and our mates just sit on a volcanic vent.

The domino effect, it's insurance company - bank - security company - individual family ... will involve government.

 

[Dungeness]

But what about the people?

@Shotgunner51 replying here as my reply there was not allowed because of a 140 word limit.

What I wanted to ask was, we keep hearing of China's massive push for urbanization and industrialization. New cities. Many virtually empty. Huge numbers of rural Chinese (young and middle aged) moving into the cities and urban jobs. The villages and countryside having only the old left behind. Many villages across the country now virtually ghost villages. I read a pretty detailed report on this some time ago and as wondering how a country can live without farming and food production. Or is your technology and robotization of agriculture now at a level that has made human labor and oversight redundant?

They are all part of Government's effort to eradicate poverty by 2020.

Many so called ghost towns have been filled up since publicized by western MSM few years ago, there are many threads here on PDF about this issue. Chinese government builds those cities with strategic plans and anticipated future demand in mind, and they are usually pretty good at making it happen.

Many so called ghost villages are located in remote area without enough fertile farmland to begin with. To eliminate poverty, those villages have to be either relocated in places with more arable farmlands, or absorbed into townships.

In the past 30 years, roughly 300-400 million people have moved to cities/towns, and drove the urbanization rate to about 50% from 20%. All done without creating massive urban slums and unemployment.

 

[padamchen]

They are all part of Government's effort to eradicate poverty by 2020.

Many so called ghost towns have been filled up since publicized by western MSM few years ago, there are many threads here on PDF about this issue. Chinese government builds those cities with strategic plans and anticipated future demand in mind, and they are usually pretty good at making it happen.

Many so called ghost villages are located in remote area without enough fertile farmland to begin with. To eliminate poverty, those villages have to be either relocated in places with more arable farmlands, or absorbed into townships.

In the past 30 years, roughly 300-400 million people have moved to cities/towns, and drove the urbanization rate to about 50% from 20%. All done without creating massive urban slums and unemployment.

Bro, that's great to know. But you did not answer my question.

Who is going to fill the rural agriculture and farm produce gap left by those 400 million Chinese folk?

 

[Dungeness]

Bro, that's great to know. But you did not answer my question.

Who is going to fill the rural agriculture and farm produce gap left by those 400 million Chinese folk?

farming companies