Chinese Real Estate Bubble

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China has been trying to build its way to economic prosperity for decades. The real estate bubble is about to burst. When it does, it will make the real estate bubbles in the early 90s in Japan and the bubble in the US in the early 2000s seem relatively benign. After years of overbuilding, there are vacant high rises – some half built and some completed – that dot the landscape throughout China, in large cities and small alike. The vacancies are present in office buildings, apartments, and even shopping malls. 

By some accounts, real estate is more than a quarter of China’s domestic economic activity. When the real estate market crashes, so will the entire Chinese economy. Many home buyers are paying mortgages on apartments that were never built. If they stop paying or complain publicly, they get a visit from the police as do their parents and other family members.