This over at CNBC:
The overdependence on new real estate in China, when the demand isn’t there, will cause the nation to eventually “hit a wall,” hedge fund manager James Chanos told CNBC Friday.
“Construction is 60-plus percent of GDP, compared to exports of 5,” said Chanos, who is the founder and president of Kynikos Associates…
China’s construction boom has resulted in whole cities being built – trouble is, no one is living in them. Buildings only a few years old are knocked down to build larger replacements. Real estate in China’s hottest markets goes for absurdly high prices. This is a bubble – and a huge bubble; maybe the largest ever seen in world history.
I can’t see any good way for this to end – China is a nation ruled by a corrupt oligarchy; it’s economy is riddled with corruption and bad debts; most of the population, even after this supposed boom of the past 10-20 years, lives in grinding poverty; China’s anti-human “one child” policy has set China on the path to demographic catastrophe. And, boys and girls, they are nuclear armed and feeling like they should take our place in the world. When the poop hits the fan, what will they do?
My worry is that they’ll engineer a war to distract and clamp down on their own people – but whatever happens, it won’t work to our advantage. We’ve got a huge mess over there, just waiting to come crashing in to world affairs.
HAT TIP: Mish’s
