The spectrum of China’s housing bubble
Real estate prices are falling across China. According to the sources of Foreign Affairs, prices fell by more than 35% in Beijing in November (units for sale). Chinese steel production has already been hit hard, showing a decrease of 15% since last June, and the slow-down could spread to all construction-related sectors. If the bubble bursts it could be dramatic for both the Chinese and global economy.
The author of the Foreign Affairs article felt, however, that despite the risks, a bursting of the Chinese real estate bubble could lead to more affordable and accessible housing for the working classes. The latter, encouraged to save less, could boost the domestic consumption that the country desperately needs to balance its growth model.