Risk To Global Economy – China’s Real Estate Bubble About To Burst
Two years after the U.S. subprime crisis, China is seeing its own real estate bubble as a result of massive state stimulus programs. Many economists are warning it could burst soon, with unpredictable results for the global economy.
An interminable sawing, screeching, drilling and hammering rips through the oppressive summer heat and humidity in the northern Chinese city of Tianjin. Here, on the city’s dusty outskirts, hundreds of new apartment buildings and houses in every imaginable style are springing up.
In an air-conditioned showroom, salespeople in yellow uniforms take potential buyers on tours of the facility. «In one year, we already sold 90 percent of North America, Asia and Europe,» customer consultant Qi Yunbu says proudly. «Now we’re preparing Africa, Oceania and South America for sale.»
«Xingyao Wuzhou,» loosely translated as «Shining Star over Five Continents,» is the name of this Chinese blend of Dubai and Disneyland, a €2.3 billion ($3 billion) development designed to imitate the world map. The gigantic residential and leisure complex is being built around and within an artificial lake.
The developers apparently want to make sure that the residents of this aquatic paradise will lack for nothing. The plans include the world’s largest indoor ski center, golf courses, a seven-star hotel, the world’s largest musical fountain and miniature replicas of famous structures like the Tower Bridge in London and San Francisco’s Golden Gate Bridge.
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