>Of course, it is all economic waste, since none of the skyscrapers are occupied. No forces of demand or supply, no consumption locally of the product (people can’t afford it).
I'm not qualified to judge how sustainable the whole Chinese system is, but what the author is saying here is simply untrue.
There are some distortions in the economy, especially in real estate, but its not a universal by any means. You get some districts/towns/buildings being built where there is no demand but someone can scrounge up land and capital, these are very under utilized, but in the boom regions space is still at a premium.
There are also distortions in residential real estate, easy access to credit + no property taxes (just one upfront sales tax) means that many people by properties speculatively without intending to rent it out or flip them in a timely manner. This means many empty apartments even in cities like Beijing and Shanghai where rents keep rising.
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>Of course, it is all economic waste, since none of the skyscrapers are occupied. No forces of demand or supply, no consumption locally of the product (people can’t afford it).
I'm not qualified to judge how sustainable the whole Chinese system is, but what the author is saying here is simply untrue.
There are some distortions in the economy, especially in real estate, but its not a universal by any means. You get some districts/towns/buildings being built where there is no demand but someone can scrounge up land and capital, these are very under utilized, but in the boom regions space is still at a premium.
There are also distortions in residential real estate, easy access to credit + no property taxes (just one upfront sales tax) means that many people by properties speculatively without intending to rent it out or flip them in a timely manner. This means many empty apartments even in cities like Beijing and Shanghai where rents keep rising.