Posted by Houses and Holes in China Economyat 7:49am on August 26, 2014 |
The FT has a simple post today that captures the sheer scale of what Australia is leveraged to. China was considered unbalanced before the GFC but after, sheesh: …To understand the scale of the resulting building boom, consider this statistic: in just two years – 2011 and 2012 – China produced more cement than the US did in the entire 20th century.
…In the past decade much of China’s construction frenzy has been driven by real demand, from people wanting to urbanise or upgrade their homes or from speculators who have almost no other options to invest their newfound wealth.
…The government itself has an enormous incentive to keep pumping the bubble up, since all land is technically owned by the state and land sales made up 60 per cent of local government’s budgetary revenues last year, according to estimates from JPMorgan. …The turning point seems to have come because China has simply built too much.
