We often hear about China's continued growth helping to maintain the Australian economy.
But I really wonder how much of this growth and demand has been brought forward (to artificially boost GDP), and whether the resulting mining boom will last as long as most economists predict in Australia.
There has been massive building in China of both commercial and residential property, and infrastructure, with a lot of this used for investment purposes. But a significant portion of this sits empty. Much like some China property investors do in Australia (when houses sit empty, and all they care about it capital appreciation, rather than the hastle of tenants, etc).
The China government is starting to put in place measure to try and curb the rise in speculative property prices in China.
But you only need to look at cities like Ordos, and wonder, if property is brought under control and prices come back making investment less attractive, will the Chinese be in a position where there is already enough capacity, with growth having been brought forward due to stimulus and speculation, that their demand for resources drops off greatly for several years, sooner, rather than later.
Ordos - empty city for 1million people.
http://www.youtube.com/watch?v=0h7V3Twb-Qk
The effect on Australia of a slower growing China would be significant, affecting both the economy and house market.
But I really wonder how much of this growth and demand has been brought forward (to artificially boost GDP), and whether the resulting mining boom will last as long as most economists predict in Australia.
There has been massive building in China of both commercial and residential property, and infrastructure, with a lot of this used for investment purposes. But a significant portion of this sits empty. Much like some China property investors do in Australia (when houses sit empty, and all they care about it capital appreciation, rather than the hastle of tenants, etc).
The China government is starting to put in place measure to try and curb the rise in speculative property prices in China.
But you only need to look at cities like Ordos, and wonder, if property is brought under control and prices come back making investment less attractive, will the Chinese be in a position where there is already enough capacity, with growth having been brought forward due to stimulus and speculation, that their demand for resources drops off greatly for several years, sooner, rather than later.
Ordos - empty city for 1million people.
http://www.youtube.com/watch?v=0h7V3Twb-Qk
The effect on Australia of a slower growing China would be significant, affecting both the economy and house market.