Posted on 08/13/2010 7:16:04 AM PDT by TigerLikesRooster
By Andy Xie 10.08.03 18:32
Fear Empty Flats in China's Property Bubble
Even worse than a price bubble burdening China's property market is a speculation-fueled quantity bubble of vacant flats
How many flats in China are sitting empty? The media recently floated a story – denied by power companies – that 64.5 million urban electricity meters registered zero consumption over a recent, six-month period. That led to a theory that China has enough empty apartments to house 200 million people.
Statistical transparency is lacking in this area, so the truth about empty apartments remains under wraps. Publishing accurate data should be of the highest priority, since the size of the nation's unused apartment stock is perhaps the most important measure of the extent and seriousness of China's property market bubble. Indeed, it's a grave concern for policymaking, since unpublished data may indicate not only a price bubble but a quantity bubble burdening the market.
Real estate is prone to price bubbles because unique factors restrict its supply response. Inflated prices have been the mark of most modern-day property bubbles. Price bubbles occur frequently and can last a long time.
In the 1980s, Tokyo saw a tremendous rise in property prices not in tandem with supply. The Hong Kong property market experienced a similar phenomenon in the 1990s.
(Excerpt) Read more at english.caing.com ...
P!
Uh, a bubble by definition IS inflated prices. Silly sentence.
64 Million? Guess someone finally beat Florida.
China ordered earlier this year that its banks stress test a potential 30% drop in valuations in the bubble markets.
This past month, they ordered them to stress test a 60% drop.
This isn’t going to end well.
How’s that Free Trade with Communist China working for us, now....
Good time for America to divest from Communist China before it crashes.....but will the Free Trader Globalists let that happen?
I find that impossible that there are 65 million empty apartments. Maybe they were monitoring North Korea’s apartments.
The problem is solved if China lets the rural migrants who want to live there move in.
This will be very ugly if their bubble pops and they pull every bit of money they can back to try to prevent a collapse.
China has overbuilt because they know that they will be needing it in the future. maybe they plan on giving their soldiers free apartments after fighting us or something...
What, like Section 8 housing for the rural peasants? That’s worked out real well here. Sounds like their Government sponsored 10% GDP is weeding itself out. Don’t they have an entire empty town with a lone Guard at the entrance somewhere?
Perhaps you can explain to the thread how forcing everyone to buy expensive goods from protected domestic manufacturers (like General Motors) makes their lives better.
Buying uneconomically cheap goods from China does help US consumers. However it severely harms US producers.
If you want a country full of slick salesmen in power and fat dumb happy consumers as voters then sure - go ahead and buy Chinese government subsidized stuff from China.
But don’t be surprised when the US producers are economically killed off, have no political power, and cease to have jobs to offer.
Sooner or later there are only make work jobs by government and no viable producing businesses. Look/sound familiar?
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