The story is obviously biased. Thames Town is actually quite a famous tourist destination in Shanghai for its foreign taste and serenity. Lots of Shanghai locals pay a day's trip there and posted very pleasant blogs about it.If it were heavily populated it would lose its uniqueness and submerged among the hundreds of thousands of similar residential subdivisions in the city.
This story has no bearing on the USA at all, except to say that the next big meltdown will come from a Communist state, and we here in the USA will have the only viable currency and ecomoney left.
"USA will have the only viable currency and ecomoney left."
Not too sure about this comment .... US government debt of over $50,000 per citizen, with over US $200 Trillion in current and future commitments (pensions etc..), an over leveraged manipulated stock market (receiving up to $84 billion per month), an over indebted population (personal debt).. and finally with China holding onto 3 Trillion of this paper promise.. I am not sure that the US$ will be considered "viable"
1. Chinese property rights are not the same as USA. You lease the property from the government for a period of time. The government can take the property back and is the ultimate owner of the property.
2. Most of the vacant property is paid in full. It is in newly developed areas. Zhengzhou is Henan. This is one of the poorest provinces in China. Ordos is in inner Mongolia. It is also one of the poorest provinces in China.
3. Corruption is endemic. Building projects are often massive money laundering and get rich quick schemes for government officials.
The Chinese property market is nothing like the USA market. I own property in China. To apply American ideology to this market is naive, stupid and extremely ethnocentric. I wish that these people would wake up and take the time to provide people in the USA with some good solid investigate reporting.
"1. Chinese property rights are not the same as USA. You lease the property from the government for a period of time. The government can take the property back and is the ultimate owner of the property."
Incorrect. They are very much the same. Try not paying your property taxes in the U.S. and see who the ultimate owner of your property is. Between property taxes and eminent domain, we never own our property and the government can take it away from us anytime they want.
Speculation is speculation, wherever it occurs. In China, it's a way of life. And when the bubble inevitably bursts, many "little people" will be ruined. China needs to open up real space for private enterprise and to enforce transparency requirements, especially on publicly listed companies.
Just got back from Erdos and Huhhot in Inner Mongolia. Unfort, I own a home and commercial properties there .
No, Erdos is not the poorest- city. It is ONE OF THE RICHEST IN CHINA. It's like Texas Oil in the 1930s. Everyone is rich.
Sure the gov owns the property, but legislation was enacted and codified by the Communist Party Congress to protect property rights.
There are moves for the gov to sell off the underlying land to property owners to enable a freehold rather than what now amounts to leasehold properties.
Yes, corruption is everywhere, but that's life. Want to make sure kids get attention from the teacher? bribe. Want better care from the dr ? bribe. Want the judge to give you a fair hearing? bribe.
This is scary...if the Chinese implode, then there will be severe repercussions in the US and around the world. One the hopes for our economy has been for China to continue to grow at 9% a year...the message from last night is - don't count on it....we need to get our fiscal house in order or we will suffer the flu when China sneezes.
Ironic that Viagra was the sponsor for the report on China's real estate bubble on 60 minutes. The report correctly points out that the genesis of residential demand is a lack of investment alternatives given a volatile and poorly regulated stock market,paltry returns on savings and restrictions on foreign ownership.Besides very low borrowing costs and the Chinese aptitude to speculate aggressively, the real estate bubble has been perpetuated by a recent history of rising prices,quick rebounds from residential price corrections when confidence had briefly faltered as was the case in HongKong. Other elements contributing to the excess might have included the underlying economic momentum or absorption rate which is much greater in China than in the US and the benefits to investors because their cost of carry is very low as property taxes (government pays) and condo fees are minimal. The Chinese government in its attempt to manage the bubble initiated a one mortgage per family policy today to add to its policy of one apartment per family per city in 2011. I doubt that these initiatives will burst the bubble because the process so far has yet to deal with the availability of credit. The government can allow the corruption or cronyism of the system to perpetuate itself in the credit markets and thereby attempt to manage prices. In the absence of credit controls, the longevity of the residential market before any correction will depend on Chinese consumer confidence and their expectation of the new government's reform as well as exports markets. For the moment I would bet on artificial stimulation (no reference to Viagra and the others)while the social networks of the world continue to demand performance.
Hey foxnoise viewers, do a search and learn something,
Who Owns America? Hint: It's not China
But there's one little problem with that conventional wisdom: it's just not true. While the Chinese, Japanese and plenty of other foreigners own substantial amounts, it's really Americans who hold most of America's debt. Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:
Hong Kong: $121.9 billion (0.9 percent) Caribbean banking centers: $148.3 (1 percent) Taiwan: $153.4 billion (1.1 percent) Brazil: $211.4 billion (1.5 percent) Oil exporting countries: $229.8 billion (1.6 percent) Mutual funds: $300.5 billion (2 percent) Commercial banks: $301.8 billion (2.1 percent) State, local and federal retirement funds: $320.9 billion (2.2 percent) Money market mutual funds: $337.7 billion (2.4 percent) United Kingdom: $346.5 billion (2.4 percent) Private pension funds: $504.7 billion (3.5 percent) State and local governments: $506.1 billion (3.5 percent) Japan: $912.4 billion (6.4 percent) U.S. households: $959.4 billion (6.6 percent) China: $1.16 trillion (8 percent) The U.S. Treasury: $1.63 trillion (11.3 percent) Social Security trust fund: $2.67 trillion (19 percent)
So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.
I found the report amazing. Look how far they have come in just such a short time. But I don't mean to be insulting, but I wonder if their building quality is as bad as their millions of consumer products. If so, then these buildings will never be occupied. I wish them all the luck in the world.
The Chinese government will bail them out, just like ours has. Heck they may even buy more American bonds.
I'll say this... I've been complaining that the San Francisco Bay Bridge Project is taking way too long to complete, in the mean time, China builds 12-24 cities a year... Not that long ago, both San Francisco Bridges were built in 3 years, what has happened to our nation?
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Not too sure about this comment .... US government debt of over $50,000 per citizen, with over US $200 Trillion in current and future commitments (pensions etc..), an over leveraged manipulated stock market (receiving up to $84 billion per month), an over indebted population (personal debt).. and finally with China holding onto 3 Trillion of this paper promise.. I am not sure that the US$ will be considered "viable"
1. Chinese property rights are not the same as USA. You lease the property from the government for a period of time. The government can take the property back and is the ultimate owner of the property.
2. Most of the vacant property is paid in full. It is in newly developed areas. Zhengzhou is Henan. This is one of the poorest provinces in China. Ordos is in inner Mongolia. It is also one of the poorest provinces in China.
3. Corruption is endemic. Building projects are often massive money laundering and get rich quick schemes for government officials.
The Chinese property market is nothing like the USA market. I own property in China. To apply American ideology to this market is naive, stupid and extremely ethnocentric. I wish that these people would wake up and take the time to provide people in the USA with some good solid investigate reporting.
Incorrect. They are very much the same. Try not paying your property taxes in the U.S. and see who the ultimate owner of your property is. Between property taxes and eminent domain, we never own our property and the government can take it away from us anytime they want.
No, Erdos is not the poorest- city. It is ONE OF THE RICHEST IN CHINA. It's like Texas Oil in the 1930s. Everyone is rich.
Sure the gov owns the property, but legislation was enacted and codified by the Communist Party Congress to protect property rights.
There are moves for the gov to sell off the underlying land to property owners to enable a freehold rather than what now amounts to leasehold properties.
Yes, corruption is everywhere, but that's life. Want to make sure kids get attention from the teacher? bribe.
Want better care from the dr ? bribe.
Want the judge to give you a fair hearing? bribe.
deal with the availability of credit. The government can allow the corruption or cronyism of the system to perpetuate itself in the credit markets and thereby attempt to manage prices. In the absence of credit controls, the longevity of the residential market before any correction will depend on Chinese consumer confidence and their expectation of the new government's reform as well as exports markets. For the moment I would bet on artificial stimulation (no reference to Viagra and the others)while
the social networks of the world continue to demand performance.
Who Owns America? Hint: It's not China
But there's one little problem with that conventional wisdom: it's just not true. While the Chinese, Japanese and plenty of other foreigners own substantial amounts, it's really Americans who hold most of America's debt. Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:
Hong Kong: $121.9 billion (0.9 percent)
Caribbean banking centers: $148.3 (1 percent)
Taiwan: $153.4 billion (1.1 percent)
Brazil: $211.4 billion (1.5 percent)
Oil exporting countries: $229.8 billion (1.6 percent)
Mutual funds: $300.5 billion (2 percent)
Commercial banks: $301.8 billion (2.1 percent)
State, local and federal retirement funds: $320.9 billion (2.2 percent)
Money market mutual funds: $337.7 billion (2.4 percent)
United Kingdom: $346.5 billion (2.4 percent)
Private pension funds: $504.7 billion (3.5 percent)
State and local governments: $506.1 billion (3.5 percent)
Japan: $912.4 billion (6.4 percent)
U.S. households: $959.4 billion (6.6 percent)
China: $1.16 trillion (8 percent)
The U.S. Treasury: $1.63 trillion (11.3 percent)
Social Security trust fund: $2.67 trillion (19 percent)
So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.
http://www.informationclearinghouse.info/article28670.htm
Heck they may even buy more American bonds.
I'll say this...
I've been complaining that the San Francisco Bay Bridge Project is taking way too long to complete, in the mean time, China builds 12-24 cities a year...
Not that long ago, both San Francisco Bridges were built in 3 years, what has happened to our nation?