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Geostrat.com founder Rob Hardy on the impact China's new tensions with neighboring countries on global business.
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-- gloomy economic news has been coming out of China.
But it's China's aggressive talk against its neighbors now that could be affecting global business -- party is founder and publisher of a -- struck.
Dot com so we've got China and Japanese -- mean they've always paid each other for decades and decades but there's a new tension going on of some tiny little islands that none of have ever heard of.
Well those islands have been Chinese call the DI you -- the Japanese call thing kick you are was actually ceded to Japan as part of the Okinawa agreement with you for with United States after World War II.
But they seemed alliance and very very rich fishing grounds and also.
There's a lot of oil and gas there that -- -- and you should always remember China has never back down from the territorial claim.
In its entire.
4005000.
Year history right.
And yet to -- Japan has a stronger navy -- receive forces -- the Chinese -- Japan having surpassed superior equipment they don't have the numbers but the Chinese military officer actually last week.
And any -- -- military publication said that they do have a superior name.
And that the that the Japanese -- -- guys have that -- so this is not gonna -- -- we don't need to worry about it too terribly much I think we should be concerned about it I don't think it's gonna blow up so to speak right away but I'm.
Seeing both sides say that they're gonna use force if necessary and that is a departure we should pay attention to okay announcement -- -- respective economic problems Japan's second quarter economy plunged in its growth from the first quarter looks like get stuck yet again for its thirtieth year or so.
And that and China bad data over the weekend will China ease up in some -- Well I think China is easing and I'm gonna go into -- mentioning I'm seeing a rebound in the property market there.
The most disturbing number that I saw -- really over the weekend was the new loan creation of only 540 billion UN.
As opposed to 919.
Billion in June -- -- that's significant and that.
In China you don't you you pay attention to the loan -- as much as you do interest rates and the reserve ratios the banks' required to have.
Right so left up -- half the level of the month before that correct and a does that why is that.
That's because there was no real demand from manufacturing and real estate.
The manufacturing is based on exports there's no export market right now for Chinese product the domestic demand is down for Chinese products.
And there been restrictions on the real estate market instead put in place by the central government but I see that changing.
-- what's your evidence of of a maybe a turn up in China real estate is there's been big fears of a of a big bubble burst.
OK -- in June and July I saw China banking which is China's largest real estate developer.
Number two -- real estate and number three evergreen by tremendous amounts of property to put an inventory.
And just this morning I saw a new home sales in Beijing municipality.
Up 68%.
Year on year in July.
It was up 49%.
Year on year.
And June.
So I think that that's starting to build the government actually gonna -- -- all these restrictions and they say they're putting on get a real estate rebound lead to more economic growth and get is that while our economy a second one here panel -- -- relentless that they -- -- that's the -- the entire real estate sector if you include only and Hillary sectors is 20% of the GDP.
They hire a lot of people all the when you look at China's.
Unemployment figure of four point 1% didn't even take into account the 240 million.
Migrant workers threatened what are those guys do they work construction they worked in manufacturing for export.
And they need to keep employment -- Given China's economic slowdown and Japan's you know crashing -- and growth.
Don't they need each other just to do -- -- -- buy stuff from each other chip -- each of a deal allowed for -- For -- fact China is Japan's number one trading partner and China buys a great deal of high tech components from Japan and then assembles under -- of them into products for export.
So the lack of the export market for China.
Is hurting Japan and Japan's also being hurt because now they only have two nuclear -- my power plants in operation.
And they're having to buy all this other energy to make up for that and that is a significant writer -- -- nothing like -- little economic interdependent to quiet those generals from from talking -- -- all right thank you very much rob hearty thank -- --
