Recently, the press has sounded the alarm about China's real estate bubble. Daily Mail
& Huffington Post
have all covered these infamous "ghost cities," which were built as hi-rise meccas in the middle of nowhere. As mentioned in the Bloomberg video
, Kangbashi, a city in Inner Mongolia, is meant to house 136 million residents. Currently, there are only 30,000 denizens!
I have a theory about China's astounding economic growth & prowess. They are going through puberty! It's like they are an orphaned teenager who suddenly got a big inheritance. After strugglingly through childhood, they suddenly have a windfall of money....and they don't know what to do with it, but spend spend spend. They are old enough to make decisions on their own but are still juveniles with massive purchasing power who lack experience & foresight. Just because you can buy a McMansion at 17 yrs old, doesn't mean you should.
That is what is happening in China. Entire cities are erected in a blink of an eye. Buildings just built 20 yrs ago are razed to construct shiny gleaming new ones. It's not just speculation of the housing market that's gone bonkers. This mentaliy of an ever escalating society pervades their culture. They intend to build forever, with no regard to long term environmental and humanitarian ramifications.
We all gotta grow up sometime
Sustainability is literally a foreign concept. When you are a teenager, you think you are invincible! The world is your oyster, you've got your whole life ahead of you. Why do you need to save money? Why can't you drink Coke all day? What's wrong with maxing out my American Express with wild shopping sprees? In the short term, it's all fun and games. However, it catches up one day. Fast forward 25 years, China may find itself a bankrupt obese diabetic with lots of material things but nothing to show for it, whose denizens have been socialized to live beyond their means. (Not unlike the USA! I'm just sayin'!)
China needs to get real about its impending housing bubble. Why? Because it is merely a function of a larger societal problem: long term economic un-sustainability. Somebody please cap their allowance & give them a curfew!
What do you think about China's stratospheric economic rise? Are they just spoiled brats headed for a bubble burst? Or are they savvy adults with solid long term plans?