Craziness in China

The real estate bubble in China has been reported on before. But some of the shots of the empty ghost cities in CBS’s latest report are stunning. Talk about misallocation of resources! As an international community we can’t afford to keep making huge mistakes like this.

China's real estate bubble.

China’s real estate bubble.

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3 thoughts on “Craziness in China

  1. The disparage between the prices of this empty housing stock and the demographics of the rural Chinese population moving into cities that can’t afford to live in it is pretty frightening. It’s interesting to see how the government has attempted to deflate the bubble through the one apartment policy.

  2. Talking to some Chinese friends last night, they pinpointed the core reason for these ghost towns as being that the local officials are evaluated on economic growth in their area. And allowing the creation of these huge real estate projects is the easiest way for them to create “growth”. Thus, from this perspective, these empty towns are a direct, and absurd, outcome of the current definition of economic growth.

  3. I saw a really interesting news report on this back in the fall on Channel News Asia (based in Singapore). Will post the link if I can find it.

    It’s important to keep in mind that people are still flocking to the first tier cities – while there may be a bubble in places like Shenzhen and Shanghai, it’s nothing like these ghost cities built for 300,000 people with a population less than 10% of that.

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