“Bloodbath,” “free fall” and “slump” were just some of the choice idioms deployed by headline writers to describe the New York real estate market during the
When will the real estate bubble burst in China?
This is a great question. Their communist system gives them such huge power to manipulate their monetary system and economy. Beginning in the late 1990’s through 2007/8 they were on a tear of spending on developments. Currently there are whole cities sitting abandoned or with practically no inhabitants.
China’s geography is a challenge. Most all of it’s population live within a few hundred miles of the coast. They tried building cities inland further to spurr industry but it has been really tough to attract young professionals to the areas. Most of the major industry is located along the coast.
China needs the US as much as the US needs China. We need them for cheap manufacturing and they need our consumers. So the ability for a trade war could be disastrous to both countries. China is trying to spend its way out of problems and for the most part they can get away with it due to their strong control of the population. They can manipulate the value of their money to suit their needs with less accountability to the outside world. Their market being large enough to force their will upon others.
Unless there is a significant change in the populations beliefs, control of the government and industry it is hard to accurately figure out the realities of their housing market. Inflation is an issue and as more and more citizens enter the middle class they expect more out of their existence. It may be a communist country but has a capitalistic spine in it. As the middle class grows they expect more from their government. We see changes in the one child policy, Chinese nationals ferreting money out of the country to buy property abroad. Their legal system leaves alot to be desired as far as intellectual property protection, especially non-Chinese companies. Chinese state owned businesses are quite aggressive and exercising their might worldwide in competition with private/public corporations.