Thursday, July 15, 2010
Notes on the Chinese property market
If you think you have it bad in the UK, here's a postcard that points out why it could be even worse in China: "Despite the general mood of optimism fueled by rising property prices in China, history suggests that all bubbles end badly. The bubble in Chinese stocks certainly did; the Shanghai Index has fallen over 55% from its late-2007 peak. The restrictions which effectively funnel China's vast savings into savings accounts that don't even match inflation or into speculative asset bubbles in stocks and real estate boosts the risks of serious losses for Chinese savers and investors, many of whom have relied on the savings of three generations to buy investment homes."