Why China’s Real Estate Bubble Needs to Pop as Soon as Possible

2010-02-17

China has seen a massive expansion in the rich class in the past five years, according to analysts.

"The country's fortune is increasing at a skyrocketing speed and is converging toward the rich class," Rupert Hoogewerf, founder of the Hurun Rich List, told Outlook Weekly.

"The number of people with a personal wealth of more than 1 billion yuan has rapidly risen since 2004. Then, there were 100. In 2009, we discovered that 1,000 people are now in the club."

According to other experts, the rich class is a group with only one thing on their mind: property.

A recent poll of wealthy people in Beijing and Shanghai by the Beijing Youth Daily found most owned at least three properties, while many subscribe to the traditional belief that, if you have money, you should invest in property. (China Daily)

Given the fundamental economic problems faced by millions of Chinese families, the above stats should be enough to piss you off. If you remain nonplussed, this example should push you over the edge:

Chen is one of the China's rapidly expanding "rich class". He has several properties in Beijing, including a grand courtyard house he uses solely to entertain friends and business associates. [my emphasis, for purposes of expressing outrage]

The large siheyuan, a traditional house found in the capital's sprawling hutongs, cost Chen 12 million yuan ($1.75 million), suggesting he is far removed from those who sweat and struggle for years to afford small, humble homes.

I think an editorial comment somewhere along the lines of "motherfucker" would be appropriate at this time. However, since I have been accused recently of having a potty mouth (keyboard?), I shall avoid use of such strong language. This is a family show.

Tags: China Business & Economy