“A Dozen Random Thoughts on China”
Dan Harris from the ChinaLawBlog just got back from his China trip and has posted some quick observations. Head on over to his post, I thought points 9 and 10 were very interesting:
9. China’s stock market is out of control. Everyone talked about it way too much. People told me they were having trouble keeping employees who were leaving well paying jobs to day trade. People told me they were losing employee productivity because so many of their employees were day trading on the job. I would ask if people in China think the market can only go up and the answer I usually got was that they realize it can go down, but they are convinced it will not go down for many years. Can you say bubble?
10. There must be 20,000 empty condominium units just on the road from Qingdao city center to the airport, and yet the building of condos goes on apace there. I was also told there are huge numbers of ultra high end condos being built on the coastal road from Qingdao to Laoshan mountain. These condos are listed at between $350,000 to $1 million and virtually none of them are selling. Again, more and more are being built. So what is going on here? My guess is that the banks want to lend and people want to borrow and if anyone were to admit that these developments are not selling, there would have to be loan write-offs and nobody wants that. Can you say bubble?
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