Posted on 06/01/2010 6:05:00 AM PDT by blam
Top Chinese Central Banker: Our Property Crisis Is Worse Than The US And UK Bubbles
Joe Weisenthal
Jun. 1, 2010, 12:57 AM
The FT snagged an interview (via Yvees Smith) with Chinese professor and PBOC monetary committee member Li Daokui on the much talked about subject of the Chinese property situation.
“The housing market problem in China is actually much, much more fundamental, much bigger than the housing market problem in the US and UK before your financial crisis,” he said in an interview. “It is more than [just] a bubble problem.”
What does that mean? Basically that high prices cause their own societal problems.
Mr Li said the high cost of housing could hamper future growth by slowing urbanisation. Rising prices were also a potential political flashpoint, especially among younger people who felt locked out of the property market.
“When prices go up, many people, especially young people, become very anxious,” he said. “It is a social problem.”
Meanwhile, Chinese premier Wen Jaibao is urging the world to maintain a "sense of crisis" in regards to the economy and that the global economy is too fragile to start withdrawing stimulus.
In other words: Dear countries that import our products, don't start slowing down.
Click the image below for a video with Li Daokui:
[snip]
(Excerpt) Read more at businessinsider.com ...
Tom Friedman - prepare to start applying egg to face.
Jim Rogers, too.
I’ve been saying this for months.
Number 1 rule of international economics: Never trust the economic data from totalitarians.
For “stimulus” China built a whole new city that its people cannot afford to live in.
New Ordos was suppose to replace old Ordos, but who can afford to live in New Ordos?
There is a youtube video about this, its pretty amazing.
The Japanese stock market is below 10,000 today. So...
New Ordos is basically owned by speculators and government to this day I think.
That’s what was reported on the video, yes.
Japan Inc was going to own the world. Yes, I remember.
Looks like China is about to find out that real estate values can also go DOWN ;-)
TIMBERRRRRRRRR!
100,000 condo for 40,000, anyone??
I still can’t imagine that so many people in China live without power and running water and tens of thousands of new homes and apartments are sitting empty in New Ordos.
lol.
How does this happen in a communist country? Wouldn’t the old China have forced them to move by now? Of course they can’t afford to buy those homes while making fifty cents an hour or whatever.
It’s a fragile and volatile situation. The newly rich Chinese who have cars and nice homes have built their foundation on the backs of the thousands who toil for 50 cents an hour.
The “newly rich” Chinese is actually a small percentage of their population concentrated in Beijing and Shanghaii. I dare say the majority of Chinese still have no electricity and running water.
Do you have any data to support that idea?
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