China cities at the peak of the largest real estate bubble in history

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

#17 Kaohsiung City (ROC)

http://en.wikipedia.org/wiki/Kaohsiung

Kaohsiung City is one of the five special municipalities in Taiwan. Located in southern-western Taiwan and facing the Taiwan Strait, it is by area the largest municipality, at 2,947.62 km2 (1,138.08 sq mi), and second most populous (by urban area) with a population of approximately 2.77 million. Since its start at 17th century, Kaohsiung has grown from a small trading village, into the political, economic, transportation, manufacturing, refining, shipbuilding, and industries centers of southern Taiwan. It is a global city with sufficiency as categorized by GaWC in 2012.[2]

Metro map

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

#4 Shanghai

http://en.wikipedia.org/wiki/Shanghai

It's often not possible to capture the extent of the urbanization on a single photo as major Chinese cities are metropolitan areas made up of districts (that are the size of cities in other countries) and have got multiple CBDs.

Here's a an aerial shot of Shanghai city center to show the size of the city. Even this aerial photo covers only 5% of Shanghai metropolitan area. Official statistics such as population are not reliable or outdated, whether intentionally or not.

[lakedaemonian]

Re: China cities at the peak of the largest real estate bubble in history

What a remarkable photo on the bottom Touchring.

I'd like to visit Shanghai again to compare/contrast.

Two words come to mind, exciting(opportunity from the critical mass) and scary(risk from same critical mass).

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

What a remarkable photo on the bottom Touchring.

I'd like to visit Shanghai again to compare/contrast.

Two words come to mind, exciting(opportunity from the critical mass) and scary(risk from same critical mass).

I plan to go there for a short vacation, probably fly to Hangzhou and then take the high speed train to Shanghai. I haven't been to Hangzhou.

[Southernguy]

Re: China cities at the peak of the largest real estate bubble in history

Why not just acknowledge that all this is a case of capitalist development (which has never been simple, linear, corruption free process) and not a "bubble"?

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

Why not just acknowledge that all this is a case of capitalist development (which has never been simple, linear, corruption free process) and not a "bubble"?

It's definitely a bubble in all sense. Of course, bubbles are a product of capitalism. China is not the first to have real estate bubbles.

Hong Kong and Singapore have seen real estate boom and busts every 7-10 years for the last 40 years. Each time it crashes, it's like the end of the world. It's the same with Thailand and Indonesia, the cycle keeps coming back.

During the 1997 Asian financial crisis, there was really blood on the street of the Indonesian capital, Jakarta, Indonesian Chinese were targeted - http://en.wikipedia.org/wiki/May_199...s_of_Indonesia.

After 16 years, an ethnic Chinese is being elected as the governor of Jakarta - http://www.thejakartapost.com/news/2...-governor.html

The banking crisis in Indonesia at that time was many times more severe than the Western Financial Crisis. Many major banks went bankrupt and depositors lost their money. There was no Fed or ECB to bail them out. But the Indonesian economy bounced back and is stronger today.

[Southernguy]

Re: China cities at the peak of the largest real estate bubble in history

I was rather thinking in the history of capitalism develpment in western countries, England, USA, etc.
There used to be devastating periodic crisis each 5-10 years.
China has achieved something quite unique (AFAIK): 30 years of accelerated growth without a single crisis.
Are we supposed to be frightened at the prospects of the first; if and when it happens?

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

I was rather thinking in the history of capitalism develpment in western countries, England, USA, etc.
There used to be devastating periodic crisis each 5-10 years.
China has achieved something quite unique (AFAIK): 30 years of accelerated growth without a single crisis.
Are we supposed to be frightened at the prospects of the first; if and when it happens?

I think we have to consider the nature of the real estate bubble in China in the context of a central planning banking sector and municipal governments.

China is not just building bungalows in far flunk places. Much of the real estate development projects are within existing cities - low rise housing demolished and replaced with high rise high density apartments. At the same time, city governments are building subways networks that link up these residential projects. This is urban renewal if you can call it - preparing China for a 21st century when gas is scarce and the majority of people need to use public transport, electric trains, buses. Subways, high speed trains, all run on electricity.

Spending a trillion dollars to reduce dependency on oil is a better investment than spending the equivalent in wars and the military.

How about the empty luxury condos? The main difference between a luxury condo and a mass market apartment is really just the price. Apartments are generally the same size, 600-1200 sq ft, whether they are mass market apartments or luxury condo units. If prices fall significantly, even the average joes can afford to buy these luxury condos.

As for the first crisis, I'm confident that China will rise from it very quickly - within 5 years. If you look at the number of people going to Macau casinos to gamble, you will know that there's no fear of losing everything and starting all over again.

The biggest danger to China is not a bubble burst but if China goes into a military conflict in the South China sea and the security of the northern border - Russia or has internal unrest due to corruption. From what I've seen, Beijing is still able to rein in the military hawks and corruption to some extent. Maintaining peace and stability is still the top priority. As for Russia, I think I don't need to elaborate on that given the recent events.

China has the critical mass, national market, has a capitalistic culture (as opposed to warrior culture in Europe and Japan), so for as long as there's peace, China will naturally prosper, and with prosperity would arise innovation, as China's past history has shown - do you know that China invented paper money? http://en.wikipedia.org/wiki/Banknote

The idea of using a durable light-weight substance as evidence of a promise to pay a bearer on demand originated in China during the Han Dynasty in 118 BC, and was made of leather.^[3] The first known banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang Dynasty (618–907), as merchants and wholesalersdesired to avoid the heavy bulk of copper coinage in large commercial transactions.^[4][5][6] During the Yuan Dynasty, banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 13th century by travelers such as Marco Polo,^[7][8] with proper banknotes appearing in 1661 in Sweden.

[gwynedd1]

Re: China cities at the peak of the largest real estate bubble in history

I think we have to consider the nature of the real estate bubble in China in the context of a central planning banking sector and municipal governments.

China is not just building bungalows in far flunk places. Much of the real estate development projects are within existing cities - low rise housing demolished and replaced with high rise high density apartments. At the same time, city governments are building subways networks that link up these residential projects. This is urban renewal if you can call it - preparing China for a 21st century when gas is scarce and the majority of people need to use public transport, electric trains, buses. Subways, high speed trains, all run on electricity.

Spending a trillion dollars to reduce dependency on oil is a better investment than spending the equivalent in wars and the military.

How about the empty luxury condos? The main difference between a luxury condo and a mass market apartment is really just the price. Apartments are generally the same size, 600-1200 sq ft, whether they are mass market apartments or luxury condo units. If prices fall significantly, even the average joes can afford to buy these luxury condos.

As for the first crisis, I'm confident that China will rise from it very quickly - within 5 years. If you look at the number of people going to Macau casinos to gamble, you will know that there's no fear of losing everything and starting all over again.

The biggest danger to China is not a bubble burst but if China goes into a military conflict in the South China sea and the security of the northern border - Russia or has internal unrest due to corruption. From what I've seen, Beijing is still able to rein in the military hawks and corruption to some extent. Maintaining peace and stability is still the top priority. As for Russia, I think I don't need to elaborate on that given the recent events.

China has the critical mass, national market, has a capitalistic culture (as opposed to warrior culture in Europe and Japan), so for as long as there's peace, China will naturally prosper, and with prosperity would arise innovation, as China's past history has shown - do you know that China invented paper money? http://en.wikipedia.org/wiki/Banknote

The only disaster a wet year could have in an arid climate is if water is used to denominate finance . If you owe me 5 gallons of water , what it really means is you owe me the amount of work to earn 5 gallons of water in the usual environment. I don't actually want 5 gallons of water. Maybe China will figure out how stupid our FIRE sector economy really is. Or perhaps we are the stupid ones who keep looking at a rain forest of housing as an impending disaster in our manufactured real estate desert, which only applies if they decide to denominate their debts with housing like we do rather than simple credit created by the Chinese government. Imagine the Mosquito Coast whose elite can manufacture ice with refrigeration in the tropics. Ice in the tropics can underwrite debt, store wealth , become a unit of exchange. Imagine the impending doom their economists would anticipate for Alaska if it were ever so stupid as to adopt the tropical system of cash flows based on ice. That's us, stupid.

[Southernguy]

Re: China cities at the peak of the largest real estate bubble in history

The only disaster a wet year could have in an arid climate is if water is used to denominate finance . If you owe me 5 gallons of water , what it really means is you owe me the amount of work to earn 5 gallons of water in the usual environment. I don't actually want 5 gallons of water. Maybe China will figure out how stupid our FIRE sector economy really is. Or perhaps we are the stupid ones who keep looking at a rain forest of housing as an impending disaster in our manufactured real estate desert, which only applies if they decide to denominate their debts with housing like we do rather than simple credit created by the Chinese government. Imagine the Mosquito Coast whose elite can manufacture ice with refrigeration in the tropics. Ice in the tropics can underwrite debt, store wealth , become a unit of exchange. Imagine the impending doom their economists would anticipate for Alaska if it were ever so stupid as to adopt the tropical system of cash flows based on ice. That's us, stupid.

Excellent summary. Further on: "China has been the source of many inventions,^[1] including the Four Great Inventions: papermaking, the compass, gunpowder and printing (both woodblock and movable type). The list below contains these and other inventions in China attested by archaeology or history."

[lakedaemonian]

Re: China cities at the peak of the largest real estate bubble in history

I plan to go there for a short vacation, probably fly to Hangzhou and then take the high speed train to Shanghai. I haven't been to Hangzhou.

I'd be intrigued by thoughts from your visit on two things:

1)The transport rail links that connect those major hub cities(people and cargo)

2)How bad those cities are in terms of heat sinks, do they have any/many green spaces we take for granted(ie Central Park in NY and here in my own city of Christchurch..more park than concrete).

Have a great holiday.

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

I'd be intrigued by thoughts from your visit on two things:

1)The transport rail links that connect those major hub cities(people and cargo)

2)How bad those cities are in terms of heat sinks, do they have any/many green spaces we take for granted(ie Central Park in NY and here in my own city of Christchurch..more park than concrete).

Have a great holiday.

Thank you. I found this ADB report that ranks China cities on livability. While reading this report, one has to keep in mind that even the best Chinese city is far from being a Melbourne or Christchurch. ;)

I just found on website that shows the air quality of Chengdu - the best ranked city. AQI or PMI of more than 100, which is in the unhealthy range!

http://www.stateair.net/web/post/1/2.html

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

Excellent summary. Further on: "China has been the source of many inventions,^[1] including the Four Great Inventions: papermaking, the compass, gunpowder and printing (both woodblock and movable type). The list below contains these and other inventions in China attested by archaeology or history."

This is an artifact dated 1287 AD. Any good guess what this is suppose to be?






The following is dated 841-846 AD:

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

I'd be intrigued by thoughts from your visit on two things:
1)The transport rail links that connect those major hub cities(people and cargo).

A traveler's video of high speed rail link from Hangzhou to Shanghai 169km(105 miles) in 49 minutes.

[touchring]

Re: China cities at the peak of the largest real estate bubble in history

A lesser known small Chinese city but nonetheless still large by international standards. The metro is still under construction.

#18 Shi Jia Zhuang

Shijiazhuang also written Shikiachwang or Shihkiachwang, is the capital and largest city of North China's Hebei province.[1] Administratively a prefecture-level city, it is about 263 kilometres (163 mi) southwest of Beijing,[2] and it administers 6 districts, 5 county-level cities, and 12 counties.


At the 2010 census, it had a total population of 10,163,788, with 2,861,784 in the urban area and 3,995,290 in the Metro Area (comprising five districts Luquan City, and the counties of Zhengding and Luancheng. Gaocheng City is about to be part of the Shijiazhuang metropolitan area as urbanization continues to proliferate. Shijiazhuang's total population ranked twelfth in mainland China.[3]

Metro Map