A reader asked what happened to China's ghost towns. - Mish Talk

Clip from the video below.

The secret behind China’s ghost towns

Interestingly, empty, crumbling, uninhabited buildings are worth more than if someone tried to make them habitable.

The rent won’t come close to paying the mortgage, and you’ll have unhappy tenants anyway.

Why are China’s new cities still empty?

China’s Lehman Moment

The video above also discusses the collapse of Evergrande, a huge Chinese developer.

The Evergrande collapse was conveniently interrupted by the Covid panic.

Here are some relevant tweets from 2021.

Pettis in the Lehman Moment

The former head of the CSRC said that, compared to other countries, too much of China’s household wealth is tied up in real estate and too little in financial assets. With property accounting for 70-80% of Chinese household wealth, he is right.
But of course, when real estate in China is 3-4 times more expensive (relative to income) than in other major economies, it would be pretty hard to do otherwise. Only a sharp and sustained decline in property prices relative to incomes or a stock market bubble can resolve this imbalance..
Japan had even higher real estate prices and a truly epic stock market bubble in the late 1980s, and I think real estate accounted for roughly 65-70% of Japanese savings.

Lehman Moment Tweet Topic:

The Pettis Lehman Moment Tweet topic

The ghost town of Ordos and the “inevitable” collapse of China

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Here’s another video. It presents the case of the bull.

All three videos are worth playing. The first two are from 2021, the ones mentioned above are from a few months ago.

Perhaps there is one or two success stories out of 50.

China’s fake GDP

There are about 50 ghost towns that can house up to 65 million people.

A reader asked what happened to China’s ghost towns. – Mish Talk