 |
 |
 |
 |
 |
Just a short comment related to a TV news bit I saw yesterday which very clearly shows the state of the Real Estate-boom situation we have seen (and continue to see) here in China in recent years.
http://www.youtube.com/watch?feature=player_embedded&v=uxjwhk1ktNw #!
Because of the ban imposed by the government a few years ago that doesn’t allow the Chinese to invest in the rest of the world, and partially due to the low interest rates paid by local banks on savings accounts, hundreds of thousands of people choose to invest their new wealth in local Real Estate.
Even after the government pronounced an edict forbidding the acquisition of more than one apartment in the big cities, the construction boom hasn’t stopped and people continue to buy property in new developments that rise on what used to be rice fields on the outskirts of the cities (and to hell with the peasants).
As a result, there are now ghost districts and towns spread all over China where all property has been sold, but no one lives there. As you may know, this situation looks quite similar to what we saw in some parts of Spain in recent years (and just look at the actual sorry state of that economy)
To further illustrate the Chinese boom, just consider the case of a dear Chinese friend of mine who has five apartments, three in Beijing and two here in Shanqin Bay, and is considering the acquisition of a sixth one here on the island of Hainan. The three in Beijing she bought before the government banned the purchase of more than one apartment, and the two in Shanqin Bay are entirely legal, as, since Shanqin Bay is a rural area, the ban doesn’t apply here.
But the thing is that here in Shanqin Bay, where I’ve been living for the past month or so, almost nobody lives. This apartment complex easily has some 600 apartments or more, and around it there are a few other half-finished constructions, but hallways, streets and beaches in the neighborhood are virtually empty.
What my friend, along with many other Chinese, is hoping, is that this area will become very affluent within a few years, which would double or triple the local Real Estate value, thus justifying her investment. But the omen that represents the TV article whose link I've posted above tends to seriously cloud such expected future.
Despite all that, the Chinese aren’t stopping to consider any hypothetical financially catastrophic situations. They just go forward and to hell with any prophet that might bring any bad news. Unfortunately, that attitude is also very similar to the one thousands of people embraced back in the U.S. during the few years preceding the financial meltdown of 2008.
As for me, I just do what I have to do, which is to keep my friend informed about these things, and the rest is all her business.
So far the Chinese government has managed to manipulate the economy in an exceptional way and millions of Chinese have benefited from it during the last thirty years. It remains to be seen whether they will know how to control the massive unrest that would result in the event that such Real Estate bubble were to burst.
After watching the video in question, you could also check out a related extra bit of news (the link is on the video) that shows a billionaire Chinese developer talking about Democracy in China. In her view, the Chinese long for democracy in their country, which may well be true of many Chinese, but there are also some other millions how think that democracy is just a western publicity stunt concocted as a tool for China bashing.
Then there are those who think everything is fine as it is and those who think China is already a democracy. The latter group includes a large number of University Students who don’t even have the slightest idea of what democracy is all about. Will we ever have Democracy in China? Well, we can only hope so.
In the meantime, and according to the winds (not) blowing on my sails, it seems that I’m still bound to stay in these latitudes for an extra week or so. Then we'll just have to see what tomorrow may bring.
May you all be well.
Salaroche
