(Update: as is common when you link to “copyrighted” content it is impossible to embed it in your blog. If you want to see the 60 minute segment scroll down to the bottom and click on the word segment)
Update II: It seems that the globe is catching on to the idiocy of building 12-24 huge empty cities on the presumption that estate value will keep on rising regardless!
China. A centrally controlled economy. A country where you are not allowed more than one child which when you think about it will half the population in one or two generations. It is also a country where through gender motivated abortions 30 million men are doomed to spend their lives without a wife and a family.
In short, China is a country which is standing at the dawn of a major population contraction and yet…. it is building between 12 and 24 giant cities every year. Cities which are empty, very expensive and which are build at the cost of villages where poor people used to live who after their houses were demolished had to move to rebuild. Cities build on precious fertile soil where people used to grow food.
If building empty cities in order to keep the economy going isn’t the very essence of bubble building I don’t know what is and the signs are there to suggest this bubble is bursting at the seams. Entire cities, half build, are now standing desolate with its building companies on the verge of financial ruin and giant malls are standing empty with fake shop fronts suggesting a Western high end luxury paradise in the making.
China, a country with over a billion people, most of whom are still desperately poor with a middle class deluded enough to buy and buy and buy (sometimes 10 per family) houses, condo’s and apartments in cities which will never fill up and will never be lived in in cities which were build just to keep the economy going.
Don’t believe me?
Here is a segment of 60 minutes showing just that and if you need more the pages has some more links with more terrifying details.