Why China's Ghost Towns Matter for Our Economy

[n2doc]

JUN 17 2011, 1:15 PM ET10
You could say it started with a little bit of food. Too little, as it turned out. Short supply and high demand for fruits and grains created historic bursts in food prices around the world. In the Middle East, where food accounts for 40% of spending, it fed political unrest. Revolution spread to Libya, whose crude crisis led to a surge in global oil prices. Expensive gas tag-teamed with expensive copper and other commodity inflation in India and Brazil. Meanwhile, debt crises restrained growth in Europe, an earthquake set back Japan, and the U.S. recovery found more walls to hit.

It's no surprise that the global recovery is facing a new round of setbacks, as the IMF reported in a new report issued today. But after high food prices, slow growth, and heavy debt, there's another potential force emerging that could block the global recovery.

This one starts with metal. Too much, as it's turning out. China's property market is showing signs of rusting. Home buys in major cities are slowing down. Construction outside the megatrapolises has infamously produced dozens of "ghost" towns that are actually more like stillborn cities, because they were designed for residents that never materialized (images and commentary via Gus Lubin at Business Insideer)

The People's Bank of China has raised interest rates four times in the last two years and raised bank deposit requirements 11 times since January 2010, reports Caixin, a Chinese business magazine. This will slow down investment and make it more difficult for the country's emerging middle class to move out to these theoretical cities. Few analysts are anticipating a full-scale meltdown of the Chinese housing market. But even a moderate dip reverberates.

more
http://www.theatlantic.com/business/archive/2011/06/why-chinas-ghost-towns-matter-for-our-economy/240629/#slide1

CHENGGONG HAS 100,000 VACANT APARTMENTS



DANTU HAS BEEN MOSTLY EMPTY FOR OVER A DECADE

[physioex]

1. Yes here is some video on the matter.....

http://www.youtube.com/watch?v=rPILhiTJv7E&feature=related

[aquart]

2. Luxury cities but no worker housing.

That bubble is gonna burst bad.

[physioex]

3. And its going to pale in comparison...

To what happened here. Really the Chinese have no sense to build sustainable living for the lower class.

[exboyfil]

4. My coworker just came back

from visiting his family in China. He was shocked by the amount of urbanization which has occurred in his city since he left. He said he would not even consider driving anymore it is so crazy.

[pnorman]

5. k&r,

n/t