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 ...
We've been ripping off the world for decades with our currency pings and trade dumping tactics.
We now have such a massive trade embalance and currency reserves, we decided to boost our GDP with building Potemkin villages (entire cities and shopping malls sitting empty). That worked for a while, but we are now learning that is economically unsustainable. Thus we created a real estate bubble even bigger than what occured in Europe and the US. And that bubble is about to go POP!
I think the housing problem concerns massive over building of high rise apartment/condos in urban centers. The hysteria to build over ran the business restraints of demand because there was so much cheap money available for construction loans.
That video is bizarre! And then the recommended one after it was over about the world’s largest mall and it was freaking empty!
Some stimulus huh? heh
I should have said outside of the major cities.
90% of Chinese poverty is outside of the cities. It would be 99% if those who have moved into the city from the rural areas were included. (citing: http://blogs.wsj.com/chinarealtime/2009/04/13/facts-about-poverty-in-china-challenge-conventional-wisdom/)
I guess the electricity thing might have been true 15 years ago but I am reading about a massive electrification effort that the Chinese have been doing. Now they are even giving subsidies to rural residents to buy appliances (13% of the price).
How dare you make me go look stuff up! lol.
Yep. Tulipmania
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