I was talking to a buddy of mine in India. He, his mother, his father and 2 sisters lived in a 150 sq ft house in mumbai thats where he grew up so maybe you have some 'Western Blinders' on my friend
Comeon atticus, you know that's just western bias regarding the building quality, it's irrelevant for this discussion. There are tens of thousands of apts all built in the 70s/80s that are still standing and fully occupied. What they are building now is no better/worse than us highrises. All the older generations have place to live, they pool their savings to buy 1 apt for the kid, since it's all single child, you got 6 people chipping in from 1 side, 12 for a couple. The migrant poor cant buy anything, the shanghai poor buys a $50k small apt, the middle class buys a $100-200k place etc... That's assume everyone is strictly 9 to 5, not counting all the extra income.. But i still dont see how that matters, so what if china inflate their gdp with a shitty model and builds hundreds of ghost towns. My point is the crash wont happen for at least a decade or more where they can no longer afford to inflate the gdp. Right now they do have real growth, money, and a very nimble govt that can react.. Still a long way to go before the foxconn labors make enough to lose competitive advantage (not just wages but infrastructure/stability, the whole package) The obvious solution govt is pushing is boosting domestic consumption before that happens, mixed results so far. Cant think of a reason the govt will remove the peg and kill itself, they will probably goto war first.. 800MM unskilled labor..i wont touch that one You are right in that once the manufacturing goes away, the money dries up, no more inflating the gdp, crash (if domestic consumption or been leader in new tech cant fill the gap). But my whole point is this wont happen for a long long time, unlike the video - showing a few ghost towns in the middle of nowhere and say china will crash. In term of trade, dont see it either. Real estate is definitely out as the govt is trying to kill the price, maybe back in stocks since it's stuck in a permabear mode for so long.. Heard govt bond you have to wait on line and fight the crowd to buy them in a lottery since everyone wants it due to the high rate...not much to play with, a real china implosion will be nice but it wont happen.
Here's a good link on China's numbers. Something doesn't stack up - http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100014380/china’s-very-mysterious-data/
blah blah blah... what difference does it make? none what so ever. people not buying condos.. w/e that is not how china is making their money - this is how china is spending their money even if their bubble bursts.. which i believe is a very drastic way of putting things they are no better or worse off. the housing price they give is such a made up number?!?! it really has no relevance on the overall condition of the country. people cannot even afford it- as the video indicates many many times. think about it. if the US gov just started building tons and tons of buildings on debt... borrowed or internally generated does that make them worse off or better off. even if they went into bankruptcy they are still better off. they have built infrastructure. and the prices will have to come down to a level where people can afford it.. right??!?!? even if the government wanted to be dicks about it and not sell... its nothing to them... they do not need to collect or pay taxes on FREE LAND!!! they do not even need to supply it with water or electricity. its a win-win.. they spend money on infrastructure. regardless of how much is cost. because money is all relative... they still win in the end. they have built something better for the ppl . period. the majority ppl in china are still dirt poor. even a slight bump in the road will barely be noticed by the MAJORITY of the population. the condos.. are not even noticed.. their existence really has no barring on their lives whatsoever. (excluding pollution =S ) money ... is just the so called carrot on the end of the stick. it really boils down to nothing. and is all relative.
You only see the tourist section...check out the great wall at Yumenguan Pass, Dunhuang, Gansu. Here is some better pictures that look more like the great wall though in case you dont believe that is actually it...
Last I checked GDP per capita in china was $7,600 compared to the USA's $46,000 per person. So they have few buyers as it is. Banks require 40% down last I checked, but banks are not the only source of financing like they are here. Most developers offer financing and require as little as 10% down (but usually 20%) and they finance the rest at 0% interest for 3 to 5 years which by then gives the buyer 40% equity. Also remember that the developers are getting financing when they build these places. If they cant sell them, then they cant pay the interest on their loans to the bank.