In a recent article, How China Ate America’s Lunch, Clif Carothers described what China has accomplished in the last thirty years:
In thirty short years, China was able to accelerate her GDP from $216 billion to $6 trillion. She amassed reserve capital of $3 trillion. She reversed America’s fortunes from the greatest creditor nation to the greatest debtor nation. She gutted America’s factories while creating the world’s largest manufacturing base in her own country. A measure of output that highly correlates to GDP is energy consumption. In June of this year, 2011, China surpassed the United States as the largest consumer of energy on the planet. While the U.S. consumes 19% of the world’s energy, China consumes 20.3%.
While China was growing their economy by a phenomenal 2,800%, the U.S. GDP grew from $2.3 trillion to $15 trillion – a mere 650% increase, of which 420% was due to inflation. There is no question that China’s progress has been remarkable. The question is whether that growth is sustainable and built upon a solid foundation.
In a February 2010 Casey Report article titled Is China’s Recovery a Fraud?, my thesis was the $2.1 trillion stimulus package rolled out by Chinese authorities after the 2008/2009 financial crash was leading to enormous malinvestment.
The officially announced stimulus package in November 2008 totaled $586 billion and was to be invested in key areas such as housing, rural infrastructure, transportation, health and education, environment, industry, disaster rebuilding, income building, tax cuts, and finance. In reality, the central government pumped an additional $1.5 trillion into the economy in an effort to maintain social stability through the subsidization of its industrial base. Chinese banks funneled cheap loans to state-owned enterprises in order to manufacture artificial profit margins to keep Chinese goods competitive and employment maximized. In the short term, the stimulus produced the desired effect.
Specifically, the Shanghai Index – which had topped out at 5,913 in October of 2007 and had fallen to a low of 1,678 by November 2008 – responded to the stimulus by rebounding to 3,300 in January 2010, as the chart below shows.
As with all monetary and fiscal stimuli, however, the initial high is always followed by a hangover. Today the Shanghai Index stands at 2,350, down 29% from when I penned my article. China is also experiencing accelerating inflation, a real estate bubble of epic proportions, a looming banking crisis due to the billions in bad loans made by Chinese banks as commanded by the Chinese government, and growing social unrest due to rising food and energy prices.
There are few opinions in the middle regarding the China story. People are either convinced China is a juggernaut that can’t be stopped and will become the dominant world power (a recent, global Pew Poll found that 47% of respondents think China is or will be the dominant global power), or they see a colossal bubble that will burst and cause worldwide mayhem. While some might think my world-view has a negative slant, I tend toward what I think is healthy skepticism that causes me to view things in a more realistic manner.
Based on the facts as I understand them, the Chinese government has created a commercial and residential real estate bubble in an effort to keep peasants employed and not rioting in the streets. In the case of the U.S. subprime mortgage bubble, critical thinkers like Steve Eisman and Michael Burry figured out it was a bubble three years before it burst. Jim Chanos and Andy Xei have been warning about this Chinese bubble for over a year. They have been scorned by the same Wall Street shills who denied the U.S. housing bubble. As Eisman and Burry proved (reaping billions), just because you are early doesn’t mean you are wrong.
Inflated Dreams
The table below paints a troublesome picture of rising inflation and gigantic over-investment in real estate. And this takes into account the fact that, much like the Bureau of Labor Statistics (BLS) here in the U.S. massages data, the Chinese statistics are tortured by the Party to paint the best possible picture. Even still, the Chinese government’s own numbers show inflation escalating as economic growth is slowing.
And the trend is not improving: The latest data show year-over-year inflation surging by 6.4% in June and food prices skyrocketing by 14%. With annual disposable income of less than $2,500 in urban areas and just $600 in rural areas, food and energy account for a huge percentage of the average Chinese person’s daily living expenses. The Chinese authorities are terrified by the revolutions sweeping across the Middle East and are desperate to put out the inflationary fires.
To contain stubbornly high inflation, the Chinese central bank has raised the benchmark interest rate three times this year, including the latest rate hike of 25 basis points announced on July 6. In an attempt to rein in excess lending, it has also hiked the reserve requirement ratio six times, ordering banks to keep a record high of 21.5% of their deposits in reserve.
Even with inflation surging, the Manufacturing Output Index fell to 47.2 in July – the lowest in 28 months, and indicating contraction. China’s automobile industry, which overtook the U.S. in 2010 with sales of 18 million autos, has experienced a dramatic slowdown, with growth of only 3% through June versus 32% growth last year. For all of 2011, the China Association of Automobile Manufacturers expects sales to decline versus 2010.
Real Estate Out of Reach
In response to the 2008 worldwide financial collapse, Chinese authorities unleashed $2.1 trillion of stimulus, or almost 33% of GDP. This compares to the U.S. stimulus of $800 billion, or 5.5% of GDP, spent on worthless Keynesian pork. Unlike the U.S., where no jobs were created, China’s command-and-control structure funneled the stimulus into building cities, malls, roads, office buildings, and residential units. Millions of Chinese were employed in creating properties for which there was no demand. Moody’s approximates that China’s banks have funded at least RMB 8.5 trillion (US$1.3 trillion) of the RMB 10.7 trillion of outstanding local government debt, which was a significant portion of the 2008 national stimulus package. When the central authorities tell the banks to lend, the banks ask, “How much?” The result has been soaring real estate inflation and malinvestment.
Everyone has seen the pictures of the ghost cities (Chenggong) with no inhabitants; ghost malls (South China Mall, Dongguan Mall) with no shoppers; residential towers with no residents; and roads with no cars. Analyst Gillem Tolluch from Forensic Asia Limited describes the scene in China today:
China consumes more steel, iron ore and cement per capita than any industrial nation in history. It’s all going to railways that will never make money, roads that no one drives on and cities that no one lives in. It’s like walking into a forest of skyscrapers, but they’re all empty.
There are 218 million urban households in China, and the central government ordered local governments to build 36 million more units by 2015. They just have one small problem: Prices for apartments in Shanghai and other major metropolitan areas have soared by over 100% in the last five years.
The average size of a “cheap” apartment in second-tier Chinese cities is 60 square meters (650 sq ft) and fetches an average price of $1,230 per square meter, or $73,800. Mid-tier apartments in Shanghai or Beijing sell for $3,500 per square meter, or $210,000 for an average size apartment. “When prices are over 20 times more than annual household income, it’s not affordable,” says Andy Xie, an independent economist in Shanghai. Millions of working Chinese have been priced out of ever owning property and blame the corrupt local government cronies and connected speculators. Anger is simmering among the masses.
Confirming the overvaluation, a report by the Chinese Academy of Social Science points out that in the country’s metropolitan centers today, house prices per square meter generally amount to between 50% and 100% of average annual incomes. “To secure a flat of 90 square meters, an average working family in Beijing and Shanghai will have to work for more than 50 years to pay off their loans, compared to five to 10 years in the developed world,” according to the report. Report authors Lu Ding and Huang Yanjie conclude that, “[S]ky-high housing prices have undermined housing affordability and caused great anxiety and resentment among the public, who are wary of the conspiracy among ‘speculators’ – developers and government officials in charge of real estate businesses.”
House of Cards
China has methodically and relentlessly grown their economy for the last thirty years. However, as the U.S. and Europe discovered the hard way with their real estate busts, if one makes an abundance of cheap-money loans to speculators, prices will rise far above the true value of the asset bought with the debt. And in time, the bubble must burst. The pressure in this bubble is mounting. Andy Xie lays out the real situation on the ground in China:
No other government in the world would spend that kind of money. If you go to local Chinese cities, you will see what they spent that money on: Tens of millions on just trees, parks and government buildings.
All of the major ratings agencies are warning about an impending banking crisis in China. Fitch downgraded the country’s credit rating and warned there was a 60% chance the Chinese banking system will require a bailout in the next two years. Just like the U.S., China has too-big-to-fail banks, with five banks accounting for 50% of the lending in China. In a July 2011 report, Moody’s cautioned that the non-performing loans on the balance sheets of Chinese banks could rise to between 8% and 12%, versus the 1% proclaimed by Chinese officials. China’s regulators have belatedly applied the brakes, but it is too late. The house of cards looks susceptible to just the slightest of breezes.
Fraser Howie, managing director at CLSA in Singapore, captured the essence of the coming collapse in his recent assessment:
If you are going to address the misallocation of capital in the banking system and credit system, that’s going to have huge knock-on effects on the profitability and viability of the banks. And if there were a major banking crisis, you would start to see money trying to get out of China. What would the government do to maintain stability? You could have a whole host of problems. It’s almost far too complicated to contemplate.
There is one sure thing regarding bubbles: They always pop. It’s in their nature.
“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises
Originally published in the August 2011 edition of the Casey Report.
Dammit. LLPOH’s response:
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“Do you really think republican’s would put his black ass on top of the ticket ?”
Yeah, there are some pretty racist Democrats, but Obama got elected.
Considering my judgement of the masses being totally ignorant of what is going on, ultimately I fear your final conclusion is correct. However, I find it laughable that you use a CNN commentator to back up your statements about Newt. CNN is the epitome of state controlled media.
I told my cat about Llpoh and Smokey trying to win a debate with Admin. His reaction was predictable.
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As always, Admin is a day late and a dollar short:
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Admin cannot spell wits, but he can poke fun at those that can.
wits plural of wit (Noun)
Noun:
1. Mental sharpness and inventiveness; keen intelligence.
2. The intelligence required for normal activity; basic human intelligence.
Synonyms:
mind – intellect – sense – reason – nous
Admin pulls his ridiculous response off of the site, but LLPOH has already spotted it. To all of you who missed it, Admin came on and called me a mongoloid who should be banned for mis-spelling wits. Realizing his mistake, he pulled the post. Gutless. Pure gutless.
I hereby claim victory – I have forced him into the most despicablre of actions – using his magic Admin button to wipe out the most grossly stupid of comments in order to save face.
llpoh
Are you loosing your mind?
Very sad trying to convince people about a phantom post.
Absolutely pathetic.
What Ivy League college did you graduate from?
Your posts should result in U.S. News & World Report dropping the school a few notches.
ADMIN RULES.
ADMIN IS GOD.
Repeat that llpoh.
So solly.
Admin will now go into hiding. He has been thoroughly whupped.
This day will live in infamy. Doubtful the Admin will show his face again for some time.
Smokey,
Cain flip flopped with his response to Paul. Back in December he flatly denied that the Fed needed an audit. His response was an Obama-esque lie. Who woulda thought?
See for yourself:
http://www.youtube.com/watch?v=q18jMzTWJ9A
Admin – I haven’t laughed that hard in a long time. Thanks so much for keeping this site alive. Really.
I near wet myself laughing. You were quick on the delete button, because I was all over that.
llpoh,
Since 1925, fourteen Presidents have sought reelection. Only four failed. Of those four, one was Jimmy Carter. Another was Gerald Ford, who had never run a major race before, and he barely lost his reelection bid.
Obama’s approval rating now is 41%.
No president whose approval rating was 44% or higher come election time has ever lost. Truman’s rating at this point was below 40% and he won. Reagan was at 43% at this point, and he won with 59% of the vote.
Obama only needs to get his approval rating up 3 points and he wins. And rest assured, the same MSM that motherfucks him now will mass solidly behind him as election day draws nigh, and they will be increasingly motherfucking his republican rival.
Obama will serve another term.
Jesus both of you are insane. Bragging about phantom posts? Claims of deity? You guys need some water.
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Smokey – sad but true. I will get no pleasure from that “I told you so”.
llpoh
I’m sure the masses have learned so much from our comments.
If they didn’t think we were doomed before this post, they do now.
We’ll be on TBP posting insulting pictures as the nuclear missiles are being launched.
llpoh,
You call that news? You mean you haven’t noticed the thumb counts being gamed here?
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Petey – I trounced him. I forced him to delete a post – he had no choice, as it was a monumental fuck-up. He could not allow it to stand. In the dark of night I expect him to remove these references to it as well. But he and I both know what he said. He needs to cut me a lot of slack for a while to repay the debt.
Admin – what a great site. In the midst of these absolutely ridiculous flamefests, there is a lot of good done. It is a pleasure to watch Jmarz/Colma/Punk/Petey/et al post. I really believe that this site does some good. Really. You should be proud. But do not let it go to your head. Many thanks again.
llpoh
SSS will not like it that you are smoking weed and imagining posts. Get control man.
Admin lurking on TBP at 1 AM to delete posts:
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Petey,
I agree that CNN eats shit. As do all the majors.
And believe me, they’d have never made that comment if Newt was alive in this race. They know he’s dead, and they were saying what many people know but refuse to say—–that Newt has done well overall in the debates.
But it doesn’t mean shit. Michael Vick will be elected POTUS before Newt Gingrich is.
Petey shoots! He scores!
llpoh,
Don’t roll over like a fucking cur.
You caught him red-handed in the midst of a despicable, cowardly action and you are not only letting him slide, you are sucking up to him?
Me and you need to have a talk, reset your priorities.
You should be going for the kill right now like a rabid rottweiler.
Smokey – I know, I know. But he knows I won, and I know I have won.
And I am too busy laughing my ass off. Punk/Petey/you and the Admin have me in stitches at the moment. I can not bring myself to kick a man while he is that far down. He fucked up big time, and left himself open for the knockout blow. He needs time to lick his wounds.
Smokey
I agree that he has done well in the debates. I simply don’t understand why he threw his hat in the ring. He seems like such a retread.
Jesus, I see it now. Obama wins in 2012, Hillary VP. What a fucking joke this country. A nation of sheep, bitching about debt they signed the dotted line for or wanted to begin with.
Good night all.
We’ll battle again soon.
Holy shit…
Cracking me up.
Petey… tell me you’re not an old fart. You’re on a roll.
Anyway… fuck China and fuck their ships full of rubber dog shit.
Colma, I’m 23.
Right on… you gotta tear into some pompous ass again soon.
You survived getting into the mix…
The Big Dogs snarl and piss and shit all over Admin’s yard and he comes out in his bathrobe with a rolled up paper smacking a snout here, throwing a stick there… before he knows it, a youngun is nipping at his heel…
Without fail, and every time, every Dog is barking and lunging for his nuts. He swats, steps in shit, yells and goes to bed… Yet he awakens each day and knows he wouldn’t have it any other way.
TBP rules.
Colma
They only sell rubber dog shit to the U.S. Not sure how they deal Eurozone, but about the same size as U.S. The 77% remainder of their exports go elsewhere, slightly better products and better prices than the rebadged stuff they peddle the U.S. now. Time was when their stuff was more expensive here and new products slower to arrive.
But we don’t have a manufacturing sector for all practical purposes. No local consumer electronics so who can complain about a Chinese DVD player with an obvious Chinese name (as opposed to a Sony [spit] made in China — for $39, that plays all formats and all regions. Yay.
Novista:
I view the term “Rubber Dog Shit” as cheap novelties designed for entertainment.
(Says one typing on a product made in China)
Wow, I miss so much in the hours I can’t be here.
So, what does everyone think about this Iran terrorist ploy?
China (Russia too) has ever so quietly (to the MSM fed) been aligning themselves with Iran for a long time. They pretty much ignore the UN sanctions and funnel billions of (our) money into Iran.
Now this “plot” against Saudi and Israel.
I smell a big commie rat. Pun only slightly intended.
It is like we are being led along the primrose path to WWIII, which at this point has to be looking like a plan to the PTB.
What else besides out and out war, since three semi-declared ones just aren’t cutting it, will get us out of this fiat induced hole?
I’m at a loss to see any other “viable” alternative for our rulers. They KNOW exactly what they are doing.
The joke is going to be if a war with Iran equates to a war with China. Think China will continue popping our the computer chips, smartphones and bullets needed for both us and them?
I hate seeing the world this way. I don’t mean that I hate that the world IS this way, it just is and my hatred has zero effect on it, I learned long ago not to bother. Human nature and the rise and fall of societies are the way they are, not much can be done and I have other things to hate. What I meant was I hate that I CAN see it this way.
It would be so much easier? less stressful? more peaceful? if I just didn’t fucking see it, or think I see what I see.
So it goes.
Yeah, it must be hellsa late for you right now, T, but I hear you.
The textbooks say war.
I just pray the players on the global stage instead opt for the real house cleaning that is in order instead. I pause to hang on the same idea, but…
Is rubber dog shit worth the trouble of world-wide war, death and famine?
The textbooks say war.
God help us.
Dammit Colma, I was hoping for the voice of reason. But I agree.
Yeah, late here, I need to run off to bed but am teaching myself OpenOffice database and got lost in it. Thought to drop by here before I get my solid six.
Let’s hope we are both wrong.
Fushizzle
Things are bad and Obama well lose to whoever runs against him.Newt sounds very smart,to bad he is an old grey headed white fuck,he cant win.Ron Paul is such a lousy campaigner,he is toast.
Mitt romney might win.At least he looks like he is alive.
Obama,well if the economy sucks and current trends continue,whoever is in charge would get canned.unless he declares martial law.
ron – of the things I worry about, Obama declaring martial law isn’t one of them. He would be deposed in under 15 minutes, probably by the officer he was attempting to make the declaration to. And there’s about no one in the USMC and very few in the Army who would follow such orders. I suppose we would have to worry somewhat more about Predators and naval blockades, given the attitudes I’ve found in the various services.
Good- fuck em!
It seems everyone has a short memory pertaining to the multiple proxy wars we fought against these fuckers in the 50s and 60s.
They’ve conqured Tibet and and ruled them with a fist as hard as the nazis.
Destroyed most of their arable land and water table
Conjoured up this insane growth for the last thirty years-at what point did the real growth and the bullshit debt fuelled growth deviate?
I’m no economist but i know that command economies NEVER work,only seem to for periods of time.
That time has come for China, Japans crash and subsequent 20 year depression were absorbed by a population with high incomes and a high standard of living.
The coming implosion will be affecting the hundreds of millions who never saw the benifits of the boom.
What will be the net result?
Revolution,war,famine fuck knows how bad its going to get.
Ive read papers on the seething social discontent during the years of plenty-what will be the response to the party that promised wealth in exchange for obedience?
When the Soviet Union economy floundered and led to the revolution how many civil wars and instances of genocide/ethnic cleansing occured from this?
Credit Suisse Buries China’s Banks
Submitted by Tyler Durden on 10/12/2011 10:55 -0400
Wonder why China just bailed out its banks, preemptively, on Monday? Here’s why. In a report issued by Credit Suisse’s Sanjay Jain, the China strategist, who joins such now infamous skeptics as Bank of Countrywide Lynch’s David Cui, has revised his base case Non Performing Loan ratio forecast from 4.5%-5.0% to 8.0%-12.0%: a unprecedented doubling in cumulative losses. Why unprecedented? Because as he explains, this could “would work out to 65–100% of banks’ equity.” Crickets? Yes, Credit Suisse just singlehandedly said the equity value of the entire Chinese banking system is between 66% and 100% overvalued (with a downside case of $0.00). So for those putting two and two together, on one hand we have the four horsemen of the Chinese apocalypse, already presented visually before by Bank of America, consisting of i) a surge in underground lending, ii) a property downturn, iii) bad bank debt and iv) and “hot money” outflows, and on the other we have the vicious loop of what this means in terms of a central planning reaction. Simply said look for China to scramble to undo all the signals that it had been trying to spark while it was fighting with the Fed-inspired inflation bubble. Only problem is that like in the US and Europe, finding the Goldilocks point where all 4 are in equilibrium will be next to impossible, especially if investors in the country’s banks realize the equity they hold is worthless and scramble to get the hell out of Dalian. Then the fears over a parliamentary vote in Slovakia will seem like a pleasant walk in the park.
Summary from Credit Suisse:
How bad could things get?
A view on China’s banks is completely a call on the potential impairment. Hence, we attempt here to dig deeper into the various sources of credit risk, both on- and off-balance sheet. Real estate, manufacturing, local government and SMEs are the four main sources of risk. They account for about 55% of the loan book, in our view, and are expected to contribute more than 80% of potential NPLs. We revise our overall NPL ratio forecast to 8.0–12.0% (from 4.5–5.0% earlier) of loans in the next few years, and NPLs would work out to 65–100% of banks’ equity. Still, we note that this is at best an estimate, and the impairment range could vary, depending on the economic growth and backdrop.
Assuming a loss ratio of 60%, typically the case in many banking crises, the potential loss on the revised NPL range would be 40–60% of the equity in the banking system. At the individual bank level, we recognise the differences (ABC and Minsheng have the highest real estate exposure, BOC and CITIC have grown real estate the fastest, Minsheng has lent the most to small enterprises and has the highest exposure to real estate and local government, etc.). However, we believe they are operating in the same environment and the margin of error would not be significant if we apply the 8–12% NPL range. The results are largely similar, with potential loss being 40–60% of their equity.
What is the market pricing in?
Using the Gordon Growth Model and current P/B, we estimate the market-implied ROE for each bank. Then we back-calculate the market-implied credit cost, which works out to 170–180 bp annually. This corresponds to incremental NPLs of 3.0% of loans every year.
Introducing price-to-adjusted book
How to value banks when we cannot rely upon the earnings and, possibly, even the book value? If we apply our base case range of 8–12% NPL ratio, the price-to-adjusted book would work out to 1.6–2.1x using consensus profits for 2012E. As a corollary, every 1% NPL ratio jump would shave off roughly one-fifth of the profits, and NPL ratio rising beyond 5% would wipe out the consensus-projected profits for 2012E.
What I want to know is how is this coming crash in China is going to effect the dollar, us treasury prices, gold, silver, DOW, nasdaq, s&P 500, DAX, etc.?
It seems to me that if China were to say to Bernanke that they needed to cash in trillion dollars worth of chips, that the fed would have to buy them, lock stock, and barrel, to avoid a bond price melt down and yield melt up. Any alternate theories that make any sense?
They could call it QE 3.5, lmao………….
a mere 650% increase, of which 420% was due to inflation
Were number two!
Were number two!!
~~~~~~~~~~~~~~~~
Asians who comprised 3% of the US population comprised one-fifth of Harvard’s enrollment, and Jews, who comprised 2.5% of the population comprised between one-fourth and one-third of Harvard’s student body. -Paul Craig Roberts
Huh. Whodathunk.
KB – where you been? I have been wondering what happened to you. Glad to see you back.
KB – where you been? -llpoh
Hospital. Had a blood clot in pulmonary arteries making it hard to get oxygen into bloodstream. Almost saw the pearly gates I did,.
Now I am taking warfarin [rat poison] anti-coagulant medicine to live. Ironic eh? =)
Damn, KB, that is not good. Hope the nurses were accomodating at least. I hope that all is well now, and that the rat poison will do the job. It is really good to have you back. Kick some ass.
Shit, KB, glad you’re still with the living!
I wish you a speedy recovery…
I just remember you saying something about kids karate kicking their mums and then you disappeared.
Glad you’re back.
Kill Bill,
That fucking blows.
Hope you are permanently out of the woods.
Damn, KB, that is not good. Hope the nurses were accomodating at least. I hope that all is well now, and that the rat poison will do the job. It is really good to have you back. Kick some ass. -llpoh
Weird thing is my heart is just fine, The clots will eventually dissolve over the next few months. The nurses were just great. It was me that could not accommodate them =(
As for ass kicking it looks like the big dogs done leapt from the porch and have whupped the yappy ankle biters already.
Kill Bill,
That fucking blows.
Hope you are permanently out of the woods. -Smokey
Thx Smokey. I am out of the woods. Thank Heavens.
Released from hospital monday and now resting at home.
I just remember you saying something about kids karate kicking their mums and then you disappeared. -Colma
Lol. Yeh I remember that, but unrelated to my near demise. Guess I could have taken laptop to hospital but didnt think about it as fire dept carried me off to emergency room and when I did remember they refused to turn around. Damn public servants =)
KB:
Your not out of the woods, partner. Make sure you get your coags checked as directed. Coumadin is nasty stuff, too much and your brain bleeds. Not enough, and those pulmonary emboli start growing again.
That said, you survived something most people die from. They don’t make it to the hospital alive. Glad you made it. Just a question, if you don’t want to answer, no prob, but are you a little heavier than you should be? Just curious. Again, I’m glad you survived, whatever caused it, don’t do it again. PE is deadly.
I know very little about China, but the author appears to know very little about basic economics.
“There are 218 million urban households in China, and the central government ordered local governments to build 36 million more units by 2015. They just have one small problem: Prices for apartments in Shanghai and other major metropolitan areas have soared by over 100% in the last five years.”
Let me explain. If prices are too high and people have been priced-out, then quite likely there is a shortage of housing. If so, these extra units will solve the shortage problem, bring prices down, and allow people to live in the units. That will be good in my opinion.
This is basic economics. If there are too many, then price falls and less are made. If too few, then price rise and more are made. This is how even a half-decent market works. I’m not talking free market religion. I am talking about the most basic function of any market. If prices are too high and people are suffering then MORE SUPPLY WILL SOLVE THIS PROBLEM. I look forward to seeing the suffering solved by the extra units and lower prices.