This article shows the layer of local influence that many of us were not aware of. It's influence is obvious, and the numbers are troubling.

How long, indeed, before the bubble bursts?

"...Local governments have every incentive to push lease prices higher, further fueling China's real estate bubble, and zero incentive to build low-cost housing for the average citizen...."

See full article from DailyFinance: http://www.dailyfinance.com/story/china ... _copyright

FYI - ^this was automatically inserted when I copied the 2 lines above, per Michael's thread of copyright, etc.

^ This has been discussed here before in bits and pieces, but this article (including the links, which are equally interesting) sums it all up very neatly.

I've been telling locals I think Shanghai's facing bubble trouble for more than a year. So far, they either don't believe it ("but China is different!"), or they aren't worried ("government won't let apartment prices fall, and even if they did, they'd rise back up within a year").

I think there will be a whole lot of unhappy investors when prices finally come crashing down. The ones I feel most sympathy for are young men and their parents, many of whom have scraped together every kuai they can lay hands on and taken out huge (to them) mortgages so they can find a wife.

I've lost contact with him now but i used to know a Director in Citibank who owned three apartments in Luijazui and much like the ones his colleagues owned, they all sat empty. This was long before the tightening of regulations on foreign owners but should prove interesting as the money borrowed was not from Chinese banks but they could be left with negative equity on the loans depending on how far it was to fall.