60 Minutes ran a story about the existence of these “ghost cities” in August of 2013. According to a financial analysis group based out of Hong Kong, Forensic Asia, this is evidence of a coming market crisis. If the market crisis were to happen, it would have similar, if not more severe effects that the Great Recession of 2008 had. Chairman of Vanke, which happens to be the world’s largest property builder, believes that the housing market in China will soon collapse, leaving 40% of the world’s metal demand unaccounted for.
The question that is on everyone’s mind: Is the housing bubble going to pop? Demand is vast for city housing, and China is rapidly expanding their urban areas. So rapidly that, according to the article, “Building the equivalent of a new Rome every 2 months for the past decade.”
A question that arises here is how this new construction is being funded. With the construction of new cities on borrowed dollars with no occupants, who will pay for all of this?