May 31, 2010 Leave a comment
This blog by Patrick Chovanec of Tsinghua University is one of the most intimate blogs about China and its economy that I have come across. Besides blogging and being a professor, Patrick makes regular appearances on CCTV making comments about government policy and the Chinese Economy. I find this important and that it further solidifies his position as a critical commentator for China because the state run TV has actually allowed for criticism against the central government by him.
Some issues he has covered include highlighting that even though there even though there is little leverage in the Chinese property market unlike the US, but the Chinese property market is still overvalued as the rich use property as a storer of value like gold. Hence the phenomenon of empty cities of luxury malls and apartments have appeared since the rich constantly purchase second, third and even fourth homes. This has led to insufficient housing for the poor as they are unable to keep up with the rising cost of housing. Recently, such exuberance in the property market has led to some Chinese turning to gold as a storer of value. He also points out that the government policy of imposing transaction taxes on property will be futile as only holding taxes will stop people from using housing as a storer of value which artificially props up the prices. Read more of this post