- The Beijing government admits that 50% of apartments sit empty. A similar number is found in most major cities in China, not to mention the entire cities that sit empty.
I find that implausible, and looked in his post for documentation. He linked to a Tyler Durden post that never made any such claim. Instead Durden claimed:
Beijing Alone Has 50% More Vacant Housing Than The US
And where did Durden get that information? He linked to a google translation of a Beijing news report:
Beijing Public Security Bureau population administration division, said yesterday that have checked 725.5 million floating population information marked rental housing 1390000 3812000 check vacant houses.
Durden actually misquoted the google translation slightly, to make it seem less “gobblety-gook-like.” I asked my wife to read the original Chinese text, and she couldn’t make heads or tails out if it–even in the original! But we did establish that google mistranslated the original. For instance the 725 million figure was actually 7.25 million in the Chinese version. But what’s a factor of 100 between friends? So you have one blogger citing another blogger who claims a third blogger made a claim he never made, and that third blogger’s actual claim involved misquoting a google translation, that was itself a mistranslation of the original. And the original is incomprehensible to a native Chinese reader. And later Balding says only a fool would trust Chinese government data anyway. So why does he cite it?
Update: Commenter Philemon verifies that in China the term “vacant” includes apartments where no one was home when the surveyor happened to show up.
Beijing’s population has been soaring in recent years, and now tops 20 million. Here is a Reuter’s article that describes the housing market:
They sleep in boxy rooms crammed into dingy low-rises and spend hours commuting to work on crowded buses as part of a trend of poorer white-collar workers being forced to the fringes of China’s wealthiest cities.
Some say these struggling college graduates who swarm out of their cramped accommodations and head to work in the urban sprawl each morning are reminiscent of worker insects in a colony. Not surprisingly, they are often referred to as China’s ant tribe.
The growing ranks of ‘worker ants’ poses a policy challenge for Beijing’s Communist Party leaders as high property prices and dim career prospects thwart the ambitions of many graduates for a comfortable middle-class lifestyle.
In Tangjialing, a dusty suburban Beijing village laced with dirt roads, college-educated software technician Kong Chao typifies the spartan existence of many such graduates.
“This is hard, but there’s no other way,” said Kong, 24, who is relatively fortunate as he has a toilet and cooking area in his cramped room and doesn’t have to share with other tenants.
Kong pays 550 yuan ($81) a month in rent, about 10 percent of his monthly wage. A similar room in a central area of Beijing would eat up most of his salary.
“You see what a crowded city Beijing is,” he said. “We younger people all come to seek work. But we can take it.”
Does China have too much housing? Perhaps by some criteria. But I don’t see any evidence in that google mistranslation to change my prior belief that China will need far more housing in the future.
Christopher Balding also has this to say:
When Scott Sumner asks “what do you want them to build more of?” and Lulu responds “that Scott can get a haircut for $4 or an ice cream cone for 50 cents shows how low productivity and wages are in China” demonstrates how far removed from reality both are.
. . .
Living in China I can attest first hand to the fact that China has easily the highest price level of any country I have visited in the past two years. An ice cream cone for 50 cents? Lulu obviously has spent too much time in Michigan and not in China.
This is one of the most comical statements I have read in 3 years of blogging. Balding must be in some sort of cocoon, like the Chaoyang district of Beijing where all the foreigners live, where they charge five times as much as in the real China. He should get out more. I just had (an admittedly basic) dinner in a nice hotel in Anhui for $2, including tax and tip. And I was the one that had the 50 cent ice cream cone from a Beijing McDonalds, not Lulu. Has he visited Switzerland?
If you priced China’s service sector at US prices it would be huge. And it’s growing extremely fast, with stores, restaurants, hotels, hair salons, etc, opening up all over China. But I suppose that’s also a “bubble” because it involves building, which is that awful “investment.” I guess the investment-phobes want the Chinese to serve meals and cut hair out in the middle of the street, as they used to a few years ago.
China’s gradually building a modern high income economy. Because they are still part communist, they are doing so clumsily, and with lots of resource mis-allocation. But the glass is still half full, and the water level is gradually rising.
PS. The snark was aimed at Balding, who’s an expert on “how far removed from reality” Yichuan and I are. Apologies if Tyler Cowen got caught in the crossfire.