FAST FIVE: Jim Chanos: China's "Leveraged Prosperity" Model Is Doomed…And That's Not The Worst Of It
I would always hear, well, don't worry: these are smart guys, technocrats who see the problem and will wean themselves off this apartment construction-on-steroids.
The idea that “I can't lose buying apartments” became ingrained with bankers, real estate speculators, and the public.
We know that's rampant in China.
I think the Chinese government has convinced themselves that by borrowing lots of money from their own citizens and elsewhere, that there's ongoing activity that is sustainable.
In the late '80s, everybody thought Japan was going to surpass the US, but they had the same problems – a banking system that was bloated, real estate prices too high, too dependent on exports, and they've had 30 years of muddling through.