China is often admired as an economic miracle, especially since the government has been able to balance, thus far, a Communist/Socialist political infrastructure while operating a semi-capitalist “free” market. But as a side effect of a global economic slow down, and considering bits of information that filter out of an extremely well controlled society, China’s economic power is beginning to be questioned. The often mentioned Chinese “housing bubble” appears in the headlines from time to time, despite a lack of understanding of what exactly is taking place.
In the United States and Europe, citizens understand what happened, and why the housing market came crashing down: Runaway prices, fueled by extremely low rates, and a lack of banking oversight. The fallout from the excesses of the past are still with us, and as Reuters pointed out on March 16, U.S. “Housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record, suggesting the beleaguered real estate sector has yet to rebound from its deepest slump in modern history.” That is in fact an expected development that has many still in denial, and that highlights the damage caused by the housing mania and how there is no quick fix in sight. Today’s U.S. New Home Sales registered the lowest point on record, with a drop of 16.9% to 250,000 units, according to Marketwatch... Read the rest of the article here>>>