Understanding China, One Blog at a Time

An American in China

China’s Ghost Cities and Video Link

Posted by w_thames_the_d on May 22, 2011

Bloomberg TV has a piece on what hedge fund manager Jim Chanos, who called the Enron bubble, calls “ghost cities” — enormous towns, hundreds of thousands of housing units and hardly anybody living there. “People haven’t wanted to think that he China growth miracle might not have as much to it as they thought,” Chanos tells Bloomberg.
The Bloomberg reporter passes along some of the Chinese argument — the government is building for the long term, the developer presold all the units etc etc. But nobody lives there. No matter how you spin it, those are unproductive assets representing poorly invested capital. Sooner or later that has to tell a macroeconomic tale — no matter how much the Chinese government claims the paper backing the assets is valued at par.”

see video here http://weblogs.baltimoresun.com/business/hancock/blog/2011/05/chinas_ghost_cities.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: