waterlily57

China Acts to Calm Its Overheated Real Estate Sector - and Misdiagnoses the Problem

Thank you Professor. We must also not forget this Chinese mentality of holding valuables for a rainy day. In the past, it was the purchase of jewelry, especially gold jewelry for this purpose. Never had the owners crossed their mind as to how much gold would appreciate. It was just a store of value. Now, having noticed that properties have a market that not only facilitate disposal and on top of that speculative, they cannot be blamed for purchasing too many and holding them vacant. Even well educated people would not have cross their mind as to the net present value of future rentals or the IRR. So, all in all, the upcoming profits (transaction) tax is not so misguided from the Chinese government' point of view.

China Acts to Calm Its Overheated Real Estate Sector - and Misdiagnoses the Problem

I understand that residential and commercial properties are held under "land use rights" much like leasehold properties. The term of the lease is probably a maximum of 99 years. So all properties are fundamentally depreciating assets. It is not known how much the state would charge for the renewal of the lease. Furthermore, most residential properties are in the form of high rise apartments so there is a depreciating factor of the building. So I think the rising prices are indeed a bubble formation, not just naive conceptualization of untaxed store value. Would the Professor elaborate?

Jim Rogers on the Next 10 Years

China is a country with innumerable dialects. The present government realized this early on and introduced Putonghua or Standard Chinese. The beneficiaries of this policy were the young people who soon found they could communicate orally all over China. They then realize that if they were to communicate internationally, they will have to master English. So really, it is the mainland Chinese who are diligently learning English for future use. If China wishes to claim Chinese as an international language, it is only for a matter of prestige and officiation and not for practical usage.

Has the China Bear Left the Room?

The China Bear has been politely asked to leave the room until after October 1, the anniversary of the founding of the PRC.

Chinese Lessons

You should know who the major shareholder is. Don't the major shareholder have the major say. CHL has the largest mobile network. How is that going to change? Haven't they created a large enough "moat".