The measured prices of Chinese real estate is based on something called a 100 cities index (based on your linked article) which is presumably specific to Chinese urban real estate.

It goes on to compare that to the median US prices (instead of the mean US prices) and compounds that error by comparing with different populations (top urban population centers in China vs all real estate in US).

Finally, it compares the 100 cities index price/sq ft rate to median US income - comparing a mean to a median - in a population with a long tailed income distribution.

RE speculation in China and the debt used to finance it are a big problem with serious contagion risks, and deserve a much higher quality discussion that that.

edit: if someone were to want to analyze this honestly, compare that real estate sq. footage figure to its US counterpart, then compare to it to mean urban income in both countries. for extra credit, see if the degree of leverage is appropriate by looking at respective debt levels, growth of debt levels, and income growth.

People were just as psyched out by the USSR. It looked miraculous until the 1980s. The Nazis psyched people out too. We didn't get to see how that one would have turned out long term because they blew themselves off the map with an insane war on two fronts but my guess would be similar to the USSR: a little period of apparently miraculous progress followed by rapid stagnation, being eaten alive by cancerous corruption, and collapse transitioning to something like Russia's present-day mafia state.

It's easier to go from zero to one than from one to N. Totalitarian regimes are very good at copying and rapidly implementing things they already know how to do, so they tend to go from zero to one with breathtaking speed. Then they hit a wall because their totalitarianism prohibits innovation (either cultural or technological) and is very fragile. The economic miracle ends when they run out of stuff to copy and usually their politics goes to hell when the Great Leader and/or revolutionary generation dies.

Social democracy sucks at rapid execution on the known. I get frustrated with it just like the next person. But it's the only system with a demonstrated track record of continuously marching into the unknown and of defending itself for long periods of time against extreme corruption.

We thought this was what China was going to do until their new emperor emerged and made himself president for life.

> Underlying all this is the simple fact that China can't allow real-estate prices to decline significantly. Politically, homeowners have come to expect their property values to rise continually in a one-way bet. [...] Rather than run those risks, China is simply ramping up development.

Isn't ramping up development to increase housing supply exactly the way NOT to keep housing prices high?

Weak Yuan is good for Chinese trade, which has an enormous surplus.

"the share of Nike shoes made in China fell off a cliff, going from 32 percent in 2012 to 19 percent in 2017." https://www.gq.com/story/nike-adidas-shifting-production-asi...

In 2015, the U.S. reached parity between offshoring and returning jobs, and 2016 was the first time since 1970 that the United States reshored more jobs than were lost to offshoring. https://blog.thomasnet.com/manufacturing-reshoring-2018-upda...

Why so Many Foreign Businesses are moving to Vietnam https://www.linkedin.com/pulse/why-so-many-foreign-businesse...

"the share of Nike shoes made in China fell off a cliff, going from 32 percent in 2012 to 19 percent in 2017."

The higher value stuff is not going to move though. If America severs the tech supply chain we're not going to see manufacturing suddenly move to the US, we're going to see skyrocketing inflation in hi tech goods.

That is, until such time the US can build up a manufacturing ecosystem equivalent to the pearl river delta, which will take years.

you mean like foxconn $10b display panel factory in wisconsin? groundbreaking this month? https://www.jsonline.com/story/money/real-estate/commercial/...

or apple's manufacturing investment in US https://www.apple.com/newsroom/2018/01/apple-accelerates-us-...

or boeing/bmw automation in US? https://www.postandcourier.com/business/south-carolina-manuf...

Point being that no, I don't think one $10 billion plant is indicative of any real kind of economic shift, any more than $5 billion spent by Apple on factories is turning the tide of manufacturing offshoring.

The Pearl River Delta has an enormous ecosystem of factories, companies and deeply interconnected supply chains valued in the trillions and both this factory and anything Apple build will be heavily reliant upon it for components, whereas vice versa is not the case.

The parent comment's phrase "higher value stuff" is referring to higher-value Chinese exports. Focusing on electronics, for example, the majority of hard drives are produced in China and Thailand. And while Foxconn is building a $10bn display panel factory in Wisconsin, that's basically a drop in the bucket compared to electronics components manufactured in China and other Asian nations. More importantly, that display facility relies on a supply chain that's heavily dependent on Chinese (and Asian in general) components and raw materials. As are many of the components in the robots and hardware used by automated American factories.

It'd take a truly mind-boggling level of investment to recreate the industry supporting that supply chain in the United States with very little hope of being competitive if that's what someone is hoping for. And while protectionist policy could be used to help shift that analysis, it'd need to be draconian enough that the Smoot-Hawley Tariff Act of 1930 would look positively minor. Because building new factories (and the factories to support those factories) can take years, you wind up with a multi-year transition period at best (more realistically, decades). That's a multi-year period where electronic component costs skyrocket and affect every single aspect of the American economy. All so that, in the end, we can pay significantly higher prices for those components. In terms of economic policy, it'd be less damaging to take the equivalent investment, printing it out as cash, and using it for the world's largest bonfire.

As for the clothing industry, that's a transition that economists fully expected. The thing about developing countries is that--at first--you've got lots of cheap, unskilled labor. Clothing and textiles are two of the industries that are all but tailor-made for a comparative advantage in that scenario. You use that cheap labor and foreign investment to industrialize, build up infrastructure, and pour every dollar you can into education programs. Eventually, that means you're going to lose your comparative advantage in certain industries. This is a bit of a simplistic overview, but the point is that losing certain clothing exports isn't necessarily a bad thing in itself for China.

https://www.thestreet.com/markets/trump-trade-war-revives-fe...

The idea that Xi is "running scared" is too ridiculous to be funny. I'm not pro-China, but one has to have some frightening bias to say that. He's the most powerful person in the world right now.

If true, I'm not sure if that means anything. Isn't the Chinese stock market notoriously volatile? I'm also under the impression that there's a much greater proportion of speculative investing going on in it compared to the US market.

https://www.fiscal.treasury.gov/fsreports/rpt/treasBulletin/...

The vast majority is held by US institutions.

I'd be careful undervaluing the influence that a single debt holder of that size could have. Plus you are further assuming that that's the totality of their influence and it's likely 2-3* that if you include influence.

I'd definitely be wary if I was going to war (trade is the new war) with another nation.

> "National Debt" of $21 trillion

> Leading foreign holders

> China $1,181.9 billion