Hu Xingdou, a Beijing-based economist, said despite China’s market-oriented reforms 40 years ago, investors still lacked respect for market and social rules. Its still a top-down economy. The Government is involved, at some level, in every industry in China.
[Its still a top-down economy. The Government is involved, at some level, in every industry in China.]
A big part of the problem is the fact that the government, which owns every sq inch of land in China, doled out 70-year leases in tiny parcels, as if China were Hong Kong. This pushed home prices up to the point that they are are 10x or more median incomes. The issue is - China has a population density of 376/sq mi vs Hong Kong’s 16,444/sq mi. China is less than 1/40 as densely populated as Hong Kong, yet conducted land sales as if it were a super-sized Hong Kong. The Party benefited while the plebes paid through the nose. That’s why the latter are unhappy.
China has half the population density of the UK. Its city skylines should look like Britain’s, with mostly low-rise housing developments. But in actual fact, China’s city skylines look like one Hong Kong after another, with vast sparsely-populated areas in between. Building vertically is very expensive, with maintenance costs to match. What the government is saving on infrastructure costs, every high rise-dwelling Chinese family has to shell out in maintenance costs on a recurring basis.