Quote:
Originally Posted by Ziobrop
China is building vast empty cities for the pending urbanization of the country.
Are they slowing down - Sure, but their growth model doesn't fit with western industrialization, or even the Rapid industrialization that occurred in other parts of Asia. I think looking at these indicators and saying doom probably isn't accurate.
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This is true but I still think there is a bit of a disconnect. Most of the people living in rural China are very poor and cannot afford the new urban housing (or aren't permitted by the government to move to the cities). I have a feeling the high-end market is overbuilt there. They're also approaching "industrialized" urbanization rates so they are going to hit diminishing returns; they used to be maybe 1/3 as urbanized as North America or Western Europe but now they are at 3/4 of the western rates. On top of this, the working age population there is already shrinking.
I think China is going to look a lot different in 2025 than it did in 2005. The change is not necessarily negative but it will be bad if everybody carries on as if nothing has changed and they expect huge returns on things like housing investments.
Here in Vancouver we are much more exposed to China's economy in NS. A lot of the economic activity here is driven by Chinese investment, particularly in real estate. That is one reason why houses here are so expensive (median $1M+ now). 30,000 or more millionaires from China have invested here, and many of the locals who buy get their income from offshore investment. It's a thorny subject, but if the taps are shut off for some reason it's probably going to get interesting here.
Low interest rates have also allowed people in Vancouver to stretch to buy ridiculous properties, while incomes are no higher than Halifax. I have a feeling many households have precarious finances here. If there are global or national economic problems or if interest rates spike those households will be in trouble.
I think Halifax is actually in okay shape. This is part of the problem with the "grass is greener" attitude; it's easy to look at the positive stuff from other places and miss the negatives. Alberta is in recession right now and BC is seriously unaffordable. The overall long-term picture in Western Canada, as one example, isn't actually that rosy.