2011 November 05 Saturday
China Real Estate Bubble Popping

This time is not different. Mish Shedlock has the details. Mish expects a 50% to 70% price drop. Though the Chinese government might opt for inflation to reduce the total price decline.

Why I care: If the Chinese economy contracts that will lower the price of oil and other natural resources enough to allow Western economies to grow - at least for a while. We live in an increasingly zero sum world where competition for natural resources drives up natural resource prices (especially oil prices) so high that economic growth in Western countries gets cut down. If China's government can't find a way to quickly the Chinese economy away from its lopsided focus on construction then we might get a year or two of growth in the Western countries while China's economy stalls.

Share |      By Randall Parker at 2011 November 05 11:54 AM  China Economy


Comments
red said at November 5, 2011 1:30 PM:

Inflation is very unlikely to result in anything besides accelerating the decline. Higher prices = less money for people to live on = lower prices on land.

A.Prole said at November 5, 2011 2:37 PM:

Wouldn't it be simpler to bring back tarriffs?


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