The Scale Of The Chinese Real Estate Crash Is Terrifying
We hear a great deal about the credit binge in advanced economies that helped lay the foundation for the 2008 financial crisis and is also widely blamed for holding back the pace of the recovery. Well, while the West has been unwinding some of this excess borrowing in recent years, emerging markets have been seeing their own credit boom.
And it’s a huge risk — particularly in China, where growth has normally pushed along the economies of several other countries.
Growth is slowing in China and its debt overhang is growing as a result. That’s a problem because countries ought to be able to grow their way out of debt. But that era may be coming to an end. And now China has a developing real estate crash of its own.
Here are the figures as provided by J.P. Morgan. (Note Hong Kong in particular):
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