Tuesday, June 24, 2008

I thought the tiger economies were immune to the West’s problems – NOT!

China's property bubble is about to burst

The sizzle is off China's property markets, and that's potentially bad news for the country's social stability.

Posted by rental john @ 12:04 PM (568 views)
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2 thoughts on “I thought the tiger economies were immune to the West’s problems – NOT!

  • montesquieu says:

    Met a girl on the plane to Shanghai last year who was talking how about things in China were for her generation (early 20s) – like most Chinese students here, she was from a rich family who had benefitted in the last 20 years from China’s liberalisation, but who had not a clue about the down sides of capitalism.

    No question there was a bubble going on. Share prices have since fallen 50% and housing looks set to do the same (the situation has been like in the US, a massive building boom). Without any kind of welfare state to cushion in economic down times, anything could happen there if unrest starts to take hold.

    Post cultural revolution, post Tianenmen Square, there has been little appetite in China for political upheaval so long as the economic goods were being delivered. But with 300m migrant workers and a peasant class that haven’t benefitted from liberalisation, if capitalism’s new victims join forces the ‘old poor’, it could get very ugly very fast.

    What we do know from history too is that when regimes get into trouble internally they start to look for an external enemy as a distraction. The west should watch out. What happens to all that oursourced production then?

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  • Lots of UK property companies building in China – oh dear.

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