For investors, many of the usual bubble warning signs are flashing. Fueled by low interest rates, prices in Shanghai and Beijing doubled in less than four years, then doubled again. Most Chinese home buyers expect that today's high prices will climb even higher tomorrow, so they are stretching to pay prices at the edge of their means or beyond. Brokers say it is common for buyers to falsely inflate income statements for bank loans.
…The Xinhua news agency quoted Goldman Sachs as saying that housing price increases had outpaced wage hikes by 30 percent in Shanghai and 80 percent in Beijing in recent years.
A popular television soap opera known as "Snail House" depicts two sisters' desperate struggle to buy an ever more unaffordable home. One sister resorts to becoming the mistress of a corrupt, married official to get money for an apartment.
Here is much more.
Hi,
The findings, empirical and theoretical, suggest that the business-cycle theory of the Austrian School of economics has much to contribute to our understanding of business cycles, particularly severe ones.
How is this just Austrian economics. It’s just economics.
Touting a principal that is common to all economics as a way to sell one variant of economics…hmmm. Look at the entire package to see whether it works, and not a part that is common to all economics.
“It’s just economics”
That’s the problem in the market competition of ideas, at the end of the day, they just assimilate you and act like nothing happened.
Chinese people don’t want to save in dollars either.
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Interesting that so many of the rosy, if not dismissive, outlooks and comments for anything Chinese in this type of reporting come from blatantly Sinophile sources explaining that China isn’t anywhere close to being in any sort of bubble in any sector.
Unfortunately the poor understanding of what’s going on in China means that some people can say anything to support their prejudices knowing how difficult it’s to probe them wrong.
The business cycle theory…..its good and they are stretching to pay prices at the edge of their means or beyond.
AnnaS is right.If China goes down then the dollar will go right after her.America’s capital revolves around China.I had a friend once who went to China I think last year and he told me that China will reach its peak soon enough and when that happens it will be tragic.Settlement Funding
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