China’s property bubble

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5 comments
  1. Is China Really On The Edge Of Mass Social Unrest?

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    One of the questions I was asked is whether this unrest is a reaction to the worsening economic situation in China (inflation, accompanied by slowing growth). I noted that, if you examine them, 9 out of 10 of these incidents are related to property removals and land development (the tenth is usually related to low-level harassment of vendors for bribes). So they’re driven, in a sense, by the boom that’s been going on, particularly in real estate, and the fact that there’s so much money to be made. In my view, this has been, in large part, an inflationary boom caused by too much money being created, so in that sense, it is tied to inflation. But now we’re also seeing asset inflation (which feels like a boom) leaking over into consumer inflation (which feels like hard times, and falls hardest on the little guy). That’s the reasoning behind my quoted comment that “”The people who were being squeezed now feel like they are being squeezed even more, to the point where they can’t bear it anymore.”

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    Read more: http://chovanec.wordpress.com/2011/06/18/cnn-china-on-the-edge/#ixzz1Pjs7MKfi

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