Anyone who can watch [the video below] and not conclude that China is headed for a bubble pop is just in denial of the facts. When I watch the video, my question isn’t who is going to occupy these vacant cities. The real question is who funded the construction. Hundreds of billions have been spent to build these cities. Banks had to make loans in order to employee millions of workers to build these monuments to stupidity. The government controls the banks and forced them to make the loans. Where is the cashflow to repay the principal and interest? There is none.
When China reports 10% GDP growth every quarter, the building of these cities is in that number. Therefore, the growth number is a fraud. China is giving the appearance of progress when they are just creating future bad debt losses. The average Chinese person could never afford one of those 64 million vacant apartments. The Chinese miracle is an illusion. I don’t know what will pop this bubble. I didn’t know what would pop the US housing bubble in 2005 either. But it popped. Bubbles always pop. ALWAYS!!!!
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