ANDY XIE (Aug 2009)Study the most basic way is to look at the bubble valuation. Assessment of housing prices, the most important way is to weigh the price earnings ratio and rental income. At present, the national level, prices per square meter is already quite close to the U.S. average. The per capita income in the United States is China's urban per capita income of 7 times. China Housing average price per square meter, equivalent to a three-month general wage income, a level that perhaps are the highest in the world.
Far as I know, now, many houses can not be rented. The average rental income, if you count those who can not be rented house, then really low and pitiful.In terms of purchasing power of people, or the expected rental income, China's housing prices are abnormally high. Some people believe that China's real estate has always been this: housing prices higher and higher. This is wrong.
Chinese real estate market bubble there is another side, that is, in local government finance in the role. Land sales income and the tax revenue property sales, accounting for a considerable portion of local government revenue, so they have a strong incentive to stimulate the real estate market. Land sales are often designed with a view to re-ignite the expected prices. For example, those who bid high prices of land, will be called "to King." Recently, the "prime sites" are often captured state-owned enterprises.When the state-owned enterprises to borrow money from state-owned banks, and through the money back to local government land auction, prices have meaning? Only funds in the government's "big pockets" to roll inside the Bale. If private developers tried to follow the state-owned enterprises chase the land market is tantamount to suicide.
The stock market never "savior"
The stock market in the final madness. Ignorance of the retail investors have been attracted rising trend. They reiterated their dream of overnight wealth. And in the past, retail investors often lose money, especially now that those who just jump into the stock market. The final madness is often not last. In China, a turning point in the stock market often associated with the political calendar. Retail investors generally believe that government would not allow the stock market in the Republic before the 60 anniversary of the fall. The short term, this belief would be self-realization. Historical experience shows that this wave of increase in the "11" before a gradual flameout.
"The government will not let the market 'diving'" This idea is deeply ingrained in the Chinese stock market. In the Greenspan era, the financial markets to believe that he always shot at the critical moment, "rescue." But in real life, in the trend reversed, the government and has no power to reverse the market trend. In the past, China's stock market ups and downs, suggesting that the government can not afford to stop the market lower. However, this fiction is still deeply rooted in the belief that investors in mind.
Some government think-tank, believes that the harmful effects of the bubble might not be so great. A popular theory is that the bubble up, the money from one person's pocket into another person's pocket, as long as paying the money flows in China, it will not produce any long-term harm.Say that people should look at Japan and Hong Kong to see exactly how not to exit the bubble, resulting in enormous damage.
The bubble under the resources are used to create more bubbles. These resources will be permanently wasted. For example, merchants are no longer willing to focus on the real economy, the shift to invest time and energy to engage in market speculation. This means that the future of China, will not have a globally competitive company. Although China has experienced 30 years of high growth, but few companies have a global competitiveness. A series of foam may be the main reason for this status quo.
Now the younger generationFor the real work interesting dull, but indulging in stock market speculation. Relative to receive a fixed monthly salary, they are more willing to see their stock prices to hold in one day come and go, and then started to have hallucinations that he can earn big money in the stock market inside. Of course, most of them probably have nothing to lose, and then, perhaps I would make some extreme action. So the social consequences could be very serious.
The housing market mirage
The real estate bubble often led to economic overheating. Building vacant, representing a permanent loss. In China, most people might laugh at this possibility. After all, the housing needs of 1.3 billion people is almost unlimited. However, the reality of the situation is entirely not the case. China's urban per capita housing area is 28 square meters, according to international standards, then this level is considerably high. China's urbanization rate is about 50%, it can be up to 70% -75%. , Due to the reasons for population aging, the rural population will be reduced. Therefore, China's urban population will be an additional 300 million people.
If we assume that these people are able to afford a property (look at today's prices, this argument is ridiculous), Chinese cities may require an additional 8.4 billion square meters of housing. China is now the work has been completed more than 20 million square meters of construction, there is still enough land to accommodate another 20 million square meters. Annual production capacity of approximately 1.5 billion square meters construction. Absolute excess capacity, that is not enough people to have lived in all of the housing, this situation may soon arise. When this situation occurs, consequences could be very serious. Real estate prices might fall sharply, as the Japanese in the past 20 years, experienced the same, this will destroy the entire banking system.
The real estate bubble caused by the most serious damage is the demographic change. High prices will reduce the birth rate. When the bubble burst, when real estate prices, low fertility level of cultural values can not be changed. Hong Kong, Japan, Korea and Taiwan in their development process experienced real estate bubble. Rampant during the bubble, and their declining birth rate, and then, despite the incentives, the situation has not changed.One is China's family planning policy in itself, has led to catastrophic population in the next 20 years. The real estate bubble to make the trend even more irreversible: Even if the Government to abandon family planning policy, there will be no significant effect on the birth rate. The next 20 years, China will face population aging and population decline in the total situation. Of course, the real estate prices will be very low, and a lower low and then.
Foam In addition to causing a net loss of redistribution, but also very serious social consequences. In the stock market bubble, the majority of households will lose, but very few people earn that pours. China's wealth gap has been a very serious phenomenon of the bubble to make the situation worse. Even if the wait for the completion of China's urbanization, a considerable part of the people, even most people probably do not have any money. This will cause social instability.When most people are in possession of wealth, and a place in society, the market economy is stable and effective.
In short, the current market frenzy will not last very long. "Correction" may occur in the fourth quarter of this year. Next year, because China is still capable of releasing more liquidity may be another round of boom.When the dollar recovery was strong, probably in 2012, China's stock and real estate market may be like during the Asian financial crisis, like avalanche.
No comments:
Post a Comment