The Sydney Morning Herald reports, “China’s inflation problem is spreading from food into the broader economy, pushing the annual rate to a new peak of 5.5 per cent.”
While Ken Peng blames China’s inflation on higher labor costs, China’s M-2 slowed to 15.1% annual growth in May, a 30-month low.
”Inflation pressure is still large,” Li Daokui, an adviser to the People’s Bank of China.
Meanwhile, some Chinese are taking their yuan and buying property wherever they can.
“The purchase restrictions in China drove them overseas, while they look for investments to counter the inflation,” said Mo Tianquan, founder and chairman of Beijing-based SouFun Holdings Ltd., which runs China’s biggest real estate website and organizes buying excursions abroad.
The Financial Post reports,
Investors are grabbing everything from US$68,000 foreclosed condominiums in Florida to US$2-million beachfront villas in Vietnam, a buying spree fueled by China’s surging wealth that mirrors the country’s expanding influence in markets for gold, oil and food. The search for overseas property accelerated in the past seven months as the governments in Hong Kong and Beijing imposed purchasing and financing limits, steps that are starting to cool off domestic markets.
According to the Post, Chinese investors are also buying foreclosures in Vegas, high-end condos in New York (they love Trump!), luxury homes in Hawaii, and anything in Silicon Valley, London or Vancouver.
Property peddlers are organizing events in Hong Kong to push overseas properties. Demand is so strong, David Lau, executive director at Singapore-based property agency Roof Real Estate Group Pte. told the Post, “our next stop is going to be Guangzhou.”
{ 4 comments }
Mercantilism is a failure, each time it is tried the country practicing this gets screwed. This sounds vaguely like what the Japanese were doing during their bubble in the 1980s. And a lot of them got hosed when property values dropped.
Also reminds me of the 70′s when the Arab property grab was all over the news.
I think the saddest thing in the article is the mention of Hong Kong being sucked into it. Not sure exactly how it all works, but was it only a matter of time since China “absorbed” it? How much longer will we be able to use it as a current example of the successes of Capitalism.
Both China and the US specialise in exporting their inflation globally.
From an economic point of view, it appears that this is what Hitler did too. I saw a report that the head of the Reichsbank begged Hitler to slow down his make-work and arms manufacturing programs because the money printing they involved would lead to serious inflation. This was followed in rapid succession by the takeovers of Austria and Czechoslovakia, the “Kristallnacht” coup against Jews (or more specifically against their businesses and bank accounts), and the invasions of Poland, Denmark, Norway, France, etc. etc.
Germany invaded other countries (and Jewish homes and businesses) first with jackboots and then imposed their fiat currency and stole or bought up cheaply every asset in sight. USA invades countries and bank accounts with fiat currency first, then buys up assets. The jackboots are only seen in the places where people have the nerve to complain about what’s going on. Being the USA’s most important financier, the Chinese have no choice but to go along with it and participate in the arsonist’s fire sale.
Comments on this entry are closed.