Shaun Rein by Fantake via FlickrFirst, there simply is not enough low- and middle-income housing, because developers build luxury apartments where the fattest margins are...
Second, building quality homes in the middle of nowhere does no good without cheap and convenient transportation, so China actually needs to invest more, not less, as many argue, in infrastructure. Many bears like Prof. Michael Pettis of Peking University fret that China is relying too heavily on infrastructure investment for its growth gains and is becoming like Japan in the 1990s. Such analysis surprisingly fails to take into account the differences between China's and Japan's spending and the fact that many Chinese are still heartbreakingly poor while Japan's quality of life is arguable higher than America's...Also, while no economy is bubble-free
China's economy is still starting from a low point, and its market remains inefficient overall. More than 400 million people are shifting from agricultural lives to urban ones, and they will need more homes and a change in economic structuring. Companies are investing in all that... China has very real economic challenges to face. However, these challenges do not threaten a systemic collapse.Much more at Forbes.
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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.
