If you think our real estate bubble was bad, just wait for China to implode

Island Turtle ^ | Junuary 11, 2012 | Corky Boyd

[Corky Boyd]

Tom Friedman, please take note. China’s lack of political wrangling is not an asset, it’s what will drag it down. Friedman’s and other liberals’ utopian dream of a benevolent dictator has never worked. It fails because unrestrained dictators, with the best of intentions, make mistakes – often grandiose mistakes. And when they are criticized and challenged, they fight to hold on to power. And then they become the Stalins, the Pol Pots and the Kim Jong Ils of the world.

And China’s single party autocracy has made a grandiose mistake. It has embarked on a building spree that according to Australia’s Special Broadcasting Service (SBS) has resulted in 64 million unoccupied housing units. Entire cities, designed to house millions, stand empty or nearly empty. Video here Yet the madness continues with construction continuing unabated, because China’s command economy demands it to sustain GDP growth. Why do they sit empty? Because most Chinese simply can’t afford them.

Speculators own many but it is unclear how many and how they can afford to sit on empty properties with no income. The value of the unsold property is staggering. Based on 64 million units at an estimated $50,000 each, the total is $3.2 trillion worth of unsold properties. It is likely local and provincial governments, which do the actual building, are taking much of the hit.

[blueunicorn6]

Turn those empty apartments into chicken coops. Everyone likes General Tso’s Chicken.

[Sgt_Schultze]

Here's a link to satellite images appended to an earlier story about the empty cities in China.

[central_va]

WE export very little to China? If they were to implode what would be the big deal. World wide oil demand would go down which would cause gasoline to go down and their cheap crap would still float over here on foreign built container ships. Nothing to see here, move along.

[familyop]

"If you think our real estate bubble was bad," just watch the next two decades of the US real estate decline (see Baby Boomer croakfest). ...and our bond collapse, dollar collapse, default and repudiation. The Chicoms will simply fill China's empty units with commies, after they're through pretending with our government-linked importers and diplomats.

[blam]

I saw an article yesterday by Gary Shiller stating that US real estate prices would decline by another 20% this year.

[SaraJohnson]

Nothing like central planning or croney corporate capitalism - what ever we are calling fascism/marxism these days - to ensure the elitists are well fed while their stupidity and corruption makes everyone else poor and dependent.

[ctdonath2]

Peruse https://www.google.com/search?q=china+ghost+cities for the staggering images. “64,000,000 unoccupied housing units” is a statistic; the actual photos are a tragedy.