>There's also considerable evidence that China's housing bubble has burst along with this economic shift. But the bizarre nature of China's housing market has hidden this effect for a while.
We get a lot of bizarre financial news about China over here. The other day there was some sort of corporate bond default (I believe it was China's first, if you can imagine that) that pundits on Bloomberg thought was the start of the end for China, as if businesses don't default for some reason or another, all the time.
The fallacy is in comparing the Chinese housing market to that of the US. China manages (or at least is trying to) real estate prices, and much of the inflated price kicks back to the government as a form of consumption tax which is used to fund further infrastructure development. This housing infrastructure is important when millions of people are moving from rural to urban areas.
Who knows if these policies will continue to work, but there is no doubt they are currently working. There has never been a growth story like this, and they are still only 1/5 the GDP per capita of the US.
We get a lot of bizarre financial news about China over here. The other day there was some sort of corporate bond default (I believe it was China's first, if you can imagine that) that pundits on Bloomberg thought was the start of the end for China, as if businesses don't default for some reason or another, all the time.
The fallacy is in comparing the Chinese housing market to that of the US. China manages (or at least is trying to) real estate prices, and much of the inflated price kicks back to the government as a form of consumption tax which is used to fund further infrastructure development. This housing infrastructure is important when millions of people are moving from rural to urban areas.
Who knows if these policies will continue to work, but there is no doubt they are currently working. There has never been a growth story like this, and they are still only 1/5 the GDP per capita of the US.