China’s massive real estate and unregulated credit bubbles are in the process of deflating. I do not expect China to reach a bottom for many years as the bad debt and misallocated resources work their ways through the system. The havoc they will bring to the global economy will be prominently felt in natural resource based economies such as Canada and Australia. Given Canadian housing prices and debt levels, Canadians can expect to catch up to the US in economic pain.
“House prices have increased by about 10-fold in the past decade in cities like Shanghai and Beijing. How come the property market cannot withstand a 30% housing price drop now?” Yi asked.
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