1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar
Source link: http://archive.mises.org/17631/chinas-boom-2/

China’s Boom

July 7, 2011 by

As municipal projects play out across China, spending on so-called fixed-asset investment — a crucial measure of building that is heavily weighted toward government and real estate projects — is now equal to nearly 70 percent of the nation’s gross domestic product. It is a ratio that no other large nation has approached in modern times.

Even Japan, at the peak of its building boom in the 1980s, reached only about 35 percent, and the figure has hovered around 20 percent for decades in the United States.

There is more here.

{ 10 comments }

Capn Mike July 7, 2011 at 4:07 pm

Too bad it’s so hard to short Chinese equities.

Giovanni P July 7, 2011 at 8:50 pm

Try shorting brazilian equities. mycap.com.br

Giovanni P July 7, 2011 at 8:42 pm

Why is it taking so long for the monetary hyperinflation arrive at the Chinese food and domestic goods prices? Is there any data on the chinese monetary aggregates?

newson July 8, 2011 at 10:08 pm

http://www.guardian.co.uk/world/2010/jul/30/garlic-chinese-commodity-bubble

da99 July 9, 2011 at 3:50 pm

You might have better luck asking this in the Mises forum: http://www.google.com/search?q=mises+forum+china+inflation+garlic

Sidenote to garlic:
Lewrockwell.com has articles on the wonders of allicin/garlic: https://duckduckgo.com/?q=site%3Alewrockwell.com+garlic

Friedrich July 8, 2011 at 4:21 am

Do I hear a small u after the b? followed by something like st?

da99 July 8, 2011 at 12:34 pm

Here is another article if another likes reading the obvious in the mainstream media:
http://www.msnbc.msn.com/id/43600432/ns/business-eye_on_the_economy/

“Last year, 55 percent of GDP was contributed by infrastructure investment — in other words bank lending,” said Carl Waters, an American investment banker until recently based in China and co-author of “Red Capitalism.” “If you keeping making bad loans that don’t pay back, you’re going to run out of money sooner or later.”

Laowaiblog July 9, 2011 at 11:52 am

It only goes to show how much China is changing in terms of real estate. The fear from the bust of the real estate bubble is very real however. Perhaps China should consider stop building new apartment buildings, when there are more than 64 million empty apartments in China:

http://laowaiblog.com/china-real-estate-bubble/

augusto July 9, 2011 at 12:05 pm

Fat chance, Laowaiblog!

Governments don’t like to cut spending, especially when it “brings about the risk of a recession”. No, what will happen is precisely the opposite: the government will increase spending, until the bubble goes boooom. Then the government will spend some more trying to save the big companies and avoid mass bankrupcy. And then everyone will be poorer.

Ned Netterville July 10, 2011 at 11:10 pm

Because the population and therefore the potential market in China is so huge, any loosening of controls (increase in freedom) can potentially have dramatic, long-lasting effects, but…

“It won’t be long now,” said the butcher as he dropped a meat cleaver into his lap. Communist “managed” capitalism is a delusion as well as a double oxymoron. To those doing business or investing in China, enjoy it while it lasts, but it might be wise to hedge one’s bets on China’s future and place stop-loss orders, which might be useless if the Shanghai and/or Shenzhen stock exchanges should ever suspend trading.

Comments on this entry are closed.

Previous post:

Next post: