I just returned from Shanghai and Sanya. There are a lot of dark apartments in Shanghai at night. I know a few Chinese who own multiple apartments, some more than 10, most of these are empty. There are limits to how much they can invest overseas, and I believe investment in real-estate is greatly increased by this.
I feel they have a real-estate bubble of incredible proportions. Everyone talks real-estate too much, and there are too many advertisements for new developments. I don't think this will end well.
One of my friends is a real estate agent. She told me recently that she and a friend had purchased a condo.
Me: Oh, so you're going to move in there soon?
Her: No, no.
Me: Oh, you're renting it out to tenants?
Her: No, no. If someone lives in it, then the value goes down. So we're going to keep it empty and then sell it next year or in a couple of years.
This cannot end well.
[1] I lived in China for years, but I learnt that here: http://yglesias.thinkprogress.org/2010/06/china-eyes-propert...
Geez investing is so cynical. :/
Insofar as they want to build apartment blocks and manufacture cars for Chinese consumers, the Chinese need steel. For that they need iron ore, and for iron ore Australia and Brazil are the main sources.
It's bad, but I think it seems worse than it is. Reason is that in East Asia buildings that have been lived in are considered "used" and therefore less valuable than a new one. So whereas in the West an investor would get himself a little pocket money by renting his building out, in the East they keep it empty to keep its value up.
The same cannot be said for the rest of the country. Many apartments are owned by companies anticipating renting the rooms to their workers. One of the buildings I was initially staying in was a dorm room sharing with other developers in my team. With wages so low it was difficult if not impossible for many of them to afford an apartment.
Many other apartments are owned by overseas Chinese, investing in their locality, awaiting their return.