patrick.net

http://www.dailymail.co.uk/news/article-2005231/Chinas-ghost-towns-New-satellite-pictures-massive-skyscraper-cities-STILL-completely-empty.html

"When asked what has happened in the past six months since the ghost cities were built, he said: 'China built more of them."

Serpentor says

"When asked what has happened in the past six months since the ghost cities were built, he said: 'China built more of them."

Govt mandated quota... The 5 Year Plan.

http://en.wikipedia.org/wiki/Five-year_plans_of_the_People's_Republic_of_China#Eleventh_Five-Year_Guideline.2C_2006.E2.80.932010

Following are the highlights of the draft of the plan, which was distributed to the media prior to the opening of the Fourth

Session of the 11th NPC: 2011–2015

Population will be controlled below 1.39 billion
Urbanization rate will reach 51.5%
Value-added output of emerging strategic industries will account for 8% of GDP
Foreign investment is welcomed in modern agriculture, high-tech and environment protection industries
Coastal regions to turn from "world's factory" to hubs of R&D, high-end manufacturing and service sector
Nuclear power will be developed more efficiently under the precondition of ensuring safety
Construction of large-scale hydropower plants will gain momentum in southwest China
Length of high-speed railway will reach 45,000 km
Length of highway network will reach 83,000 km
A new airport will be built in Beijing
36 million new affordable apartments for low-income people

Among the Chinese people I know (not Chinese-Americans), a common thread is frugality, saving, and poor financial decisions regarding investments.

In China, one is limited in the choices for investment. The China stock market seems rigged, dishonest, risky, frothy. Think Sinoforest. So, many Chinese are reluctant to invest in their stock market. Chinese to my knowledge are not able to buy American mutual funds either.

So, Chinese often do buy empty apartments because renting them "ruins" their brand new characteristics. Strange but true, the investment of real capital is going to something that doesn't provide any income and has dubious future value.

Some folks doubt whether the Chinese can afford these massive projects. Of course the Communist government can. In China, much of the wealth resides in the government which in the USA resides in the people.

I often feel sorry for my Chinese friends, they have lost fortunes, whether on Apple stock options (how did she do that?), houses in Nevada, restaurants in San Francisco, betting on sports, buying mutual funds and selling when frightened, etc.

The funny thing is the reason given to me so often for these mistakes is "I was unlucky."

I cannot imagine how much money they would attract if Vanguard, T.Rowe Price and Fidelity opened a branches in Beijing, Shanghai and Hong Kong.

Not Sure, you don't know jack about Asian culture or their economy. You're just talking the talking points you've been fed to make excuses for our own failing.

China is Communist like we are a Democracy.

Both grossly perversed in their own way.

We're no longer a true democracy, and China is not a true Communist country. Not in the sense where people get ration coupons for their goods and services and have to whisper about their hopes and dreams, for fear of the fascist police persecuting them as a dissident.

clambo says

I often feel sorry for my Chinese friends, they have lost fortunes, whether on Apple stock options (how did she do that?), houses in Nevada, restaurants in San Francisco, betting on sports, buying mutual funds and selling when frightened, etc.

Ever go to the San Mateo race track, Bay 101, or local Casinos...
Yipes!

Not Sure says

Serpentor says

"When asked what has happened in the past six months since the ghost cities were built, he said: 'China built more of them."

Indeed, and don't forget that they also have the people needed to FILL those cities. To the HILT and then some.

Also, don't forget that they're a COMMUNIST nation, at least in theory, so it wouldn't be so outlandish to think that someday the Chinese government could suddenly decide to SUBSIDIZE or even openly GIVE AWAY those dwellings to the people, because ..well..THAT'S the kinda shit these commie bast@rds do sometimes.

if they had all those people to fill up the cities, where are they now?

What do you think will happen when the government step in and take the people's most valuable possession and turn around and give it to someone else? Given their obsession over material goods and real estate, do you think that will bode well? Minimum mass riots, worst case revolution.

If they were all "bought with cash" as you say, how long did these people save to buy these luxury homes? Do you think they will just sit by while the government seizes them?

When real estates start getting seized, what do you think will happen to the price of real estate? What happens when the largest investment of an entire nation goes to zero?

are you just throwing arguments up to see what sticks? do you really believe what you are saying?

Not Sure says

You won't find any historical references of Chinese people speculating on RE because the Chinese have never been as WEALTHY as they are now and thus capable of affording it.

I think if you actually read Chinese history, you'd find a very prosperous country during the Tang and Song dynasties. But you're probably just here to sling mud and see what sticks as someone said.

Think it's probably different culture values different stuff. Chinese parents, typically, will do anything to get the kids to go good schools, so they are probably also the ones much more readily to spend on houses at Cupertino or Palo Alto than American Whites. And, the majority of them (in the past) are coming from where the standard of living is probably lower than that of US and hence more tolerant to the conditions of the houses. Whether they have jacked up the price or not, maybe, not intentionally but certainly contribute to it to certain extent.

As for the real estates in China, think that's a different story, people keep buying these expensive property probably do that with the hope they are going higher, more from a speculative angle rather getting it as home.

And, I don't think this will apply to all Asians or Chinese descendants not from China. If there is a pattern in the behavior, it's most likely environmental reasons.

However, I would stress the ridiculous housing price in bay area is not solely due to *crazy* Chinese buyers.

Not Sure says

Where's the coffee that you're gonna use to fill your empty mug right now? That's right!: SOMEWHERE *ELSE*.

you are kidding right? Are there some kind fucking magical egg where China can populate those empty cities without taking people from another city and doesn't impact prices there?

Not Sure says

Uh, the ones who are OBSESSED over material goods and real estate are YOU AMERICANS, not the Chinese. THEY have other, deeper values. That's why THEIR civilization spans thousands of years and YOURS barely made it past 250 before it collapsed into a pile of shitte.

I'm going to say my favorite phrase: Who the fuck are you?

You don't know about the Chinese culture. I've seen it, lived it, both in modern times and when it was a commie shit hole. If you think Americans are materialistic, you don't know shit about the fucked up values they have in China right now. The cultural revolution wiped out all the traditional values and the semi-capitalism corrupted the citizens into money hungry status climbers who care nothing about morals. What are the deeper values you speak of? the same ones that put dry wall chemicals into baby formula? The ones that copies everything they see without regard to intellectual property rights?

Not Sure says

If you bothered to stay on topic, you'd notice that we're talking about EMPTY CITIES where, by definition, the units have NO OWNERS. Ergo, no one would care if they're seized.

Wrong. The residential properties were sold to private citizens by corporations funded by local governments. The roads and buildings were financed by local governments and corporations set up by those local governments. at the minimum it is a serious mis-allocation of investment, at worst it is a ponzi scheme done at historical levels.

Not Sure says

Gee, I didn't know the Tang and Song dynasties produced a GDP of $10.06 TRILLION, where the world's LARGEST EXPORTERS, had a per capita income of $7.600 and where the largest CREDITOR nation on the planet back in the year 900.

(Does THAT stick?)

fail.

At the peak of each Dynasty. (not just Tang and Song, but also Han, Jin, yuan, and Ming) they were the worlds dominant superpower. They traded as far as Europe and received tributes from all parts of the world. Sure they don't have GDP numbers back then, but neither did Europe, Middle east or Africa.

do you know anything about China? fuck

Not Sure says

(Does THAT stick?)

No, it doesn't, because it's a non-sensical response. The Chinese were still relatively wealthy to the rest of the world during those dynasties. Doesn't detract from my point at all and is just noise.

SparrowBell says

However, I would stress the ridiculous housing price in bay area is not solely due to *crazy* Chinese buyers.

Agree, we've had this discussion many times, and it never seems to hold water.

Serpentor says

You don't know about the Chinese culture. I've seen it, lived it, both in modern times and when it was a commie shit hole. If you think Americans are materialistic, you don't know shit about the fucked up values they have in China right now. The cultural revolution wiped out all the traditional values and the semi-capitalism corrupted the citizens into money hungry status climbers who care nothing about morals. What are the deeper values you speak of? the same ones that put dry wall chemicals into baby formula? The ones that copies everything they see without regard to intellectual property rights?

Yes, if anything, third worlders like Indians and Chinese tend to be more brand-conscious than here. For example, back in the day when people used tape players, if you brought a gift to your cousin in India and China of a Panasonic tape player instead of a Sony Walkman, your cousin would probably complain to his friends that you were a cheap bastard. While we might consider the Panasonic tape player here to be just as good (and it might even have more features), the brand-conscious cousin wouldn't agree.

There is a historical reason for this. Brands are an indication of quality in those places. People are so used to buying cheap shit that doesn't work and breaks quickly that they latch onto certain brands. It used to be more like that here, but we have far more reliable brands here in a much more mature local economy and our warranties are worth far more.

And yes, Chinese companies do often cut corners -- that goes without saying.

corntrollio says

The Chinese were still relatively wealthy to the rest of the world during those dynasties. Doesn't detract from my point at all and is just noise.

And here's another claim about how prosperous China was in the past relative to the west (and India too):

http://www.economist.com/node/21528979

People who grew up in America and western Europe have become used to the idea that the West dominates the world economy. In fact it is anomalous that a group of 30-odd countries with a small fraction of the world’s population should be calling the shots. For most of human history economic power has been determined by demography. In 1700 the world’s biggest economy (and leading cotton producer) was India, with a population of 165m, followed by China, with 138m. Britain’s 8.6m people produced less than 3% of the world’s output. Even in 1820, as the industrial revolution in Britain was gathering pace, the two Asian giants still accounted for half the world’s GDP.

Not Sure says

Serpentor says

do you know anything about China? fuck

I know that Chinese women's genitalia runs sideways.

yes, I know from first hand knowledge that you must have been birthed sideways

Not Sure says

Yes, from HERE:

right. all those poor peasants living in shanty shacks are going to all of a sudden go out and bid up prices on luxury condo high-rises. right.

I'm not even going to dignify the sex tour comment with a real response. I feel bad for anyone who has to pay to get laid or even have to get on a plane to get laid.

I just have to say if you are Chinese, you should be ashamed of yourself for not knowing jack shit about your own country's history.

If you are an ignorant American, I pity you for idolizing a corrupt society.

based on your postings, its pretty obvious that you are one of those poor bastards who bought an overpiced POS in China.. I hope it helped you find a woman or get laid, because your hope of ever making money on it is quickly slipping away.

Friend of mine married a chinese woman straight from China and she now lives in the U.S. with him. She still owns her original apartment, and she just recently purchased another when they were in China on holiday. However, her friend was allowed to buy two. When you buy a new apartment in China however it's literally an empty concrete shell. He said it was a really easy transaction compared to here in the U.S., taking place in a matter of hours. They don't have red tape all over everything and multiple parties taking a cut on every deal you make like we have here, which allows the economy to grow quickly and flourish.

Serpentor says

zzyzzx says

Serpentor says

Yes, Chinese Men buy a homes before they get married, that has always happened. [edit, thats a new phenomenon, back then they get married and the bride moves in with the family] Regardless, When the do get married, the newlyweds are supposed to move into the house and start a family. They don't sit empty like they do now.

I was going to say something like supposedly in China owning a car and a house makes it much easier to get laid (in relative terms compared to other parts of the works). At least that's what I am lead to believe.

If the homeowner isn't insulted by your offer...you didn't bid low enough!!!

isn't that true anywhere? you pull up in a Lambo in a club in Miami, panties start dropping. Money attracts the Vag. What does that have to do with chinese culture and bubble real estate?

Moreso in China, since their one child policy has created excess males. Unless they all plan on going gay.

lol not likely, the one lasting inheritance from the west that the east isn't likely to rise above soon is manhood=insecurity. Would certainly help ease the need for the 1 child policy if some people could just be themselves, weather live openly in their innate sexuality, or telling their parents to shove off the grandkid hopes family honor demands.

Serpentor says

yes, I know from first hand knowledge that you must have been birthed sideways

haha, so funny...

Serpentor says

Not Sure says

Gee, I didn't know the Tang and Song dynasties produced a GDP of $10.06 TRILLION, where the world's LARGEST EXPORTERS, had a per capita income of $7.600 and where the largest CREDITOR nation on the planet back in the year 900.

(Does THAT stick?)

fail.

At the peak of each Dynasty. (not just Tang and Song, but also Han, Jin, yuan, and Ming) they were the worlds dominant superpower. They traded as far as Europe and received tributes from all parts of the world. Sure they don't have GDP numbers back then, but neither did Europe, Middle east or Africa.

do you know anything about China? fuck

serpentor you are a snake

Name calling. classy.

If you must know. I'm a tiger in chinese zodiac. Not that I believe that crap.

Serpentor says

The cultural revolution wiped out all the traditional values and the semi-capitalism corrupted the citizens into money hungry status climbers who care nothing about morals. What are the deeper values you speak of? the same ones that put dry wall chemicals into baby formula? The ones that copies everything they see without regard to intellectual property rights?

Good point. I guess America isn't so bad after all, at least by comparison.

zzyzzx says

Moreso in China, since their one child policy has created excess males. Unless they all plan on going gay.

That's why so many Chinese are moving to San Francisco.

wthrfrk80 says

zzyzzx says

Moreso in China, since their one child policy has created excess males. Unless they all plan on going gay.

That's why so many Chinese are moving to San Francisco.

(ROFL)

Serpentor says

When people say "its part of the Chinese Culture" to buy up overpriced houses (whether its in China or Cupertino) my internal BS flag starts waving.
when you look back in the history of China, there are no cases where property were purchased to sit and not generate income. No cases when luxury real estate are bought by ordinary families and are sitting idle because nobody can afford the rent.

You really try to make a case that they are all rational, level-headed, business oriented people.

I wonder,

If they had Mao Tse Tung and Communism for so many years, can your argument really hold?

Serpentor says

you think all those factory workers making a few bucks a day saved up enough money to buy that luxury condo? (with food and goods prices growing by double digits) LOL

We know that regular workers won't have much. The country is run by communist thugs and corruption. They are going to eat their own #$%^$ now when all colapses. Party cannot last that long.

Hi Serpentor,

You seem to be very knowledgeable about Chinese culture, so maybe you could comment. I've heard that many of the Chinese government elites are preparing "escape plans" to the U.S., Canada, etc., getting residencies and houses. Anecdotally, my Las Vegas realtor has been showing a house when a Tour Bus of asian investors drove up to check it out. I don't believe that there's a large enough number of Chinese investors to influence the market, but there seem to be a few who make a striking impression because they bid high and pay cash. My impression is that the Chinese elites are not confident about how things will play out over there.

Giuseppe

Giuseppe,

I would certainly try to escape China (with my loot) if I could. But how can they do it? Wouldn't gov't goons try to prevent it? Unless they themselves are gov't goons...

Yeah, I think it's only the gov't connected types who would be able to travel, spend large sums of money, and get investor type residency cards for themselves and immediate family. That's why I think it's only a few from China itself, not enough to bid up our whole real estate market.

Giuseppe says

Hi Serpentor,

You seem to be very knowledgeable about Chinese culture, so maybe you could comment. I've heard that many of the Chinese government elites are preparing "escape plans" to the U.S., Canada, etc., getting residencies and houses. Anecdotally, my Las Vegas realtor has been showing a house when a Tour Bus of asian investors drove up to check it out. I don't believe that there's a large enough number of Chinese investors to influence the market, but there seem to be a few who make a striking impression because they bid high and pay cash. My impression is that the Chinese elites are not confident about how things will play out over there.

Giuseppe

I'm sure some "elites" have plans of moving out of the country.. but the people that have the most power are staying put. There is still too much money to be made. I'm not so sure if they want to get out. There, they can do whatever they want. Power, money, Lambos for kids, etc. In the US, they are just regular people. Why would they want to come out here?

I'm not saying none of the elites are leaving. I'm sure some are trickling out. But there are not enough of them to make an impact in real estate of any city. They have zero impact in "fortress areas" like Cupertino and PA. The vast majority of the Bay Area fortress residents are long time immigrants that worked hard and moved up the ladder.

Its not that easy to get money out. You'll need to get get into a a"partnership" with a well connected foreigner to get money out of the country. see http://en.wikipedia.org/wiki/Neil_Heywood

The Indian property bubble is heating up too and by most accounts has frothed up to unsustainable amounts. Who knows, maybe the Mayan 2012 prophecy might be true too. All of us descend into a Mad Max scenario!! Those of us in CA, at least have the original Mad Max-Mel Gibson and hey the villain Tina Turner too!!!

Grandparents go to America, parents stay in China to take care of the business and they send their children with granparents to get education in American universities and stay in America.

Of course only government well connected communist party members have power and can make money in China and can get ahead of the rest.

Someone said that there is not enough privileged in China to be able to come to USA. Well, there is about 80 mil of communist party members in China. It is more than a lot of other countries total population.

Another group is of course former Hong Kong's citizens.

We have, in the USA, chosen to import the Asian culture of misery. Constant work, multiple jobs, crushing cost of living, and a dog eat dog rat race.

And the laughable thing is that the Asian helicopter parenting and obsession with forcing math and other academics on kids produces uncreative, rude self centered junk most of the time with an occasional success story.

Sad. Its time to try and figure out a way out of the city centers and prepare to live out life the right way.

Mick Russom says

produces uncreative, rude self centered junk most of the time

Yep. I think you see the future of Silicon Valley. There ain't no future in it.

Mick Russom says

We have, in the USA, chosen to import the Asian culture of misery. Constant work, multiple jobs, crushing cost of living, and a dog eat dog rat race.

Uugh, I hope not.

My coworker put on the audio book version of The Outliers the other day when we were working in the lab. This comment, along with the audio book's explanation of "Why Asians are good at math" jive perfectly. Looking at the Asian cultural legacy, and the historical role of working rice patties (which apparently yield more and more the harder you work them, which is sort of the opposite of western agriculture), the workaholism makes total sense. Unfortunately, I don't think that a lot of people ever got the memo about "life balance" or that a lot of employers exploit exactly that cultural work ethic without ever letting the worker get the pay-out. At this point, it seems sort of like a dogmatic behavior pattern since it is "expected" but nobody is bothering to think about why. "More work, more money...someday" and that someday may never come, at the expense of all of your todays.

bmwman91 says

it seems sort of like a dogmatic behavior pattern since it is "expected" but nobody is bothering to think about why.

From what I've heard and read, many of the youth in Japan are asking those sorts of questions and frustrating the more established part of their society by choosing not to buy cars and homes.

Interesting. Japan does strike me as being one of the more "modern" Asian societies in a lot of ways, despite being able to hang on to a lot of older traditions (nothing wrong with that, either). I need to visit Japan someday.

You will have a great time in a superficial visit as a bumbling foreigner tourist.

Try to have a deeper experience and you will hate it.

Serpentor says

The cultural revolution wiped out all the traditional values and the semi-capitalism corrupted the citizens into money hungry status climbers who care nothing about morals.

The same thing happened here in the late 1960's and 70's...to a lesser degree.

Btw. As a non scientific observation, I hear a lot more taiwanes accents in cupertino then Cantonese or mainland mandarin.