China’s real estate mega-bubble could be bad news for global steel markets
Jul 01, 2010 | 06:19 AM
| Kevin Foster
BANGKOK, Thailand Put together more than $1 trillion in mismanaged bank credit, a housing market some say is in worse shape than it was in the U.S. before the sub-prime crash, rising inflation and a troubled labor market, and China's near-term future looks grim. But just as the country's state-driven economy has managed to absorb and overcome a number of challenges in recent decades, there seems to be a good chance that it will ride out the latest troubles.
China's overheated, dysfunctional real estate market is the government's biggest headache and the country's No. 1 topic of conversation. The problem is simple very few city dwellers, even among the new middle class, can afford to buy the kind of house that their rising incomes have led them to expect. The ratio of housing price to household income in China was about 91 in 2009, and as high as 201 in major cities like Beijing and Shanghai, according to statistics quoted in state-run media, compared with a ratio of about 31 in the United States.....
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