Friday, October 27, 2006

china bubble watch

wie nachhaltig die geschichte in china ist werden wohl erst die nächsten jahre zeigen. fakt ist das dieser spieler so oder so der entscheidende faktor für die nächste decade sein wird. ich empfehle jedem undebigt die anderen geschichten über china zu lesen (besonders shanghai)

it will be interesting to see how china will perform the next few year. either way you look at china, it will be main force that drives the market up or down. i recommend to read the piece about the bubble in shanghai.
China's Property Curbs Fail to Cool Investment Growth

Investment growth in China's real estate industry accelerated in the first nine months of the year

Property investment rose 24.3 percent, or 2.1 percentage points faster than a year earlier..... Growth picked up from 24 percent through August.

The government's measures including restricting land supply and lending and imposing new taxes have failed to cool investment and property prices that more that doubled since 2000. Property prices in China's 70 major cities rose 5.5 percent in the third quarter from a year earlier.... Shanghai is the only city where property prices have fallen, the survey showed.

In the first nine months, property investment rose to 1.29 trillion yuan ($163 billion), mainly boosted by investment in residential projects, which rose 29.5 percent. Investment growth in the residential market, the target of the central government's policies, was 8 percentage points faster than a year earlier, the release said

China's developers put 18.9 percent more apartments and offices under construction in the first nine months, covering a total of 1.6 billion square meters (17.2 billion square feet).

Local Resistance
Premier Wen Jiabao moved to restrain the property boom amid concern that it might turn into a bubble and trigger an eventual collapse in prices. A housing bust could hurt social stability and derail the world's fastest-growing major economy, analysts said

``Real estate investment has helped local governors build up city images and pave way for personal development,'' said Wayne Zane, a director of property consultant Colliers International in Shanghai. ``That's encouraged local officials to resist the central government's attempts to cut land supply and investment.,, No one wants to be the first to fully apply the central government cooling measures as they're afraid of losing investment to rivals.'' (it is the same as with plants etc. sometimes it feels like the gouverment in peking has lost control.../ dasselbe passiert mit diversen industrieansiedlingen. manchmal hat man das gefühl als wenn peking die kontrolle verloren hat....)

Shanghai Scandal
The economy in Shanghai, one of China's richest cities, expanded almost 60 percent in the three years through 2005 as property prices more than doubled.

Former Shanghai Communist Party Secretary Chen Liangyu attained the position of Politburo member after building the city into China's financial hub and helping secure the right to host the 2010 World Expo. Chen was fired last month for his role in misuse of the city's pension fund, part of which was diverted to real estate projects.