If you do a recent google search on Chinese property markets it seems they are at bubble point. A number of Hong Kong based investment companies think this will now happen. Because the Chinese banks also do not write off/down debt, or should I say because they just don't disclose this info in fear of looking bad and because local officials also don't want to disclose this in case they look bad in China everything is rosy. But here is the problem, because the central government has done a big stimulus drive, ordering banks to lend, many of these loans are most likely going to be now toxic, foreign investment is going to want to start pulling out because of to many toxic assets.
Already a number of the large developers in China are struggling to pay back repayments. With a lot of hedge funds been placed against the property markets I think the Chinese government has setup the property market as a house of cards waiting to full down. The % increase in property/investment from the start of this year does not stack up, and has outpaced itself. It is interesting to notice also because the Australian government relaxed laws last year many Chinese and investment Chinese have been buying up property here in Australia.
If their markets do collapse, which seems to be inevitable, I wonder how much of a knock-on affect it will have here. Investors from China may want to sell off property here to cover toxic investments in China. Half year profits are due out soon, and I would think this will have a negative impact on the domestic housing market. Figures from commercial real estate also show dropping occupancy rates in China. Not a good sign at all. Read up on Chinese small cap stocks to look at just how fast these have been rising, a pretext to a market crash.
You might be asking what this has to do with GMG, but as far as I can see its all interlinked. I wonder what a massive property market crash in China will do to CIC/GMG. It won't be good, that is for sure, and its coming.
NOW, CHECK THIS OUT, its just scary for GMG http://www.optuszoo.com.au/news/7686082/there-s-worse-to-come-for-the-economy.html
The below article is about Chinese investment in Australia.
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