360° Coverage : Why China's Property Sector Could Be Worthless, One Day

2 Updates
Why China's Property Sector Could Be Worthless, One Day
Photo Credit: Forbes Business

Why China's Property Sector Could Be Worthless, One Day

Jan 1 2014, 7:24pm CST | by

Some believe that China’s property sector is a bubble ready to be burst, citing scores of empty construction structures built for the sake of stimulating economic growth. Others believe that there...

Filed under: news

 
 
 

41 weeks ago

Why China's Property Sector Could Be Worthless, One Day

Jan 1 2014, 7:24pm CST | by

Some believe that China’s property sector is a bubble ready to be burst, citing scores of empty construction structures built for the sake of stimulating economic growth. Others believe that there is no bubble in China’s property sector, saying the country’s huge population and large flow of people from the countryside to cities will help demand catch up with supply.

Irrespective of which side one is on in this debate, China’s property sector may be worthless one day, if pollution continues at the same rate. Younger generations will opt to leave the country rather than move into polluted cities, depressing demand for real estate, and aggravating the problem of excess capacity in the sector.

China is the world’s top producer of carbon dioxide, the chief greenhouse gas- a status that isn’t expected to change any time soon, as China’s government is part of the problem rather than part of the solution.

To be fair, China’s pollution is, in part, the result of the country’s rapid industrialization, a problem every industrialized country faced at one point or another. This means that the problem could go away as the country eventually transitions from an industrial to a service-based economy.

In the meantime, the Chinese government has placed the fight against pollution on the top of its agenda. “Energy conservation and environmental protection is a long-term strategy as well as an urgent practical option for China, ” stated China’s Vice-Premier Li Keqiang at the climate change summit in DurbanSouth Africa.

Indeed, China has developed a comprehensive environmental policy similar to that of the world’s second producer of carbon dioxide, the US; and it was the host of last UN’s conference on climate change.

The trouble is, however, that in contrast to the US and other advanced economies– where the polluters are private companies — in China, by and large the polluters are government companies—State Owned Enterprises (SOEs) and Town Village Enterprises (TVEs).

This means that the government, as owner and manager of these enterprises, is part of the problem it is called upon to address.

Furthermore, SOEs and TVEs are “units” rather than true enterprises. They provide employment for unionized workers and financial support for local schools and hospitals. This makes any government action against these corporations too costly for the communities they serve — and eventually non-enforceable.

Compounding the situation is the country’s one party system, which places all three constitutional powers in the hands of the same group, turning the government into both the regulator and the regulated. This unusual and conflicting role makes it very unlikely for a polluter to be prosecuted, be afforded a just and fair trial, or be sanctioned.

The bottom line: Bubble or no bubble, China’s property sector is at risk of turning worthless, if pollution continues at the current rates — and if young people opt to leave the country rather than to live in polluted cities.

Source: Forbes Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workf ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies o ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Repeated viewing of violence and sex 'desensitises' parents
Washington, Oct 20 (IANS) In a stunning report, researchers have revealed that when it comes to sex and violence, the more parents watch TV shows or movies with explicit scenes, the less they care about what their kids can watch.
 
 
Nigeria declared free of Ebola
London, Oct 20 (IANS) The World Health Organisation (WHO) Monday officially declared Nigeria free of the Ebola virus disease after six weeks with no new cases.
 
 
New Zealand fault hole revealing secrets of earth's crust
Wellington, Oct 20 (IANS) An international team of scientists drilling a 1.3-km deep hole into the Alpine Fault in New Zealand's South Island say they are already gaining valuable insights into the earth's crust less than a quarter of the way down.
 
 
Young kids often given wrong medication
New York, Oct 20 (IANS) One child is affected every eight minutes when usually a well-meaning parent or caregiver commits an unintentional medication error, said a US-based study.
 
 
 

Latest from the Network

1,074 new dengue cases in Chinese province
Beijing, Oct 18 (IANS) China's Guangdong province has reported 1,047 new cases of dengue fever, health authorities said Saturday. Six people have already died in Guangdong -- five in Guangzhou and one in adjacent...
Read more on Business Balla
 
Blake Lively 'always' wanted to be mum
Blake Lively has ''always'' wanted to be a mother. The 27-year-old actress is expecting her first child with husband Ryan Reynolds and she admits she's been dreaming of this moment since she was a youngster. Speaking...
Read more on Celebrity Balla
 
Kris Jenner 'torn apart' by Bruce's new relationship
Kris Jenner feels ''torn apart and angry'' that Bruce Jenner is dating her former assistant. The 58-year-old matriarch split from the 64-year-old Olympic gold medalist last October following 22-years of marriage but is...
Read more on Celebrity Balla
 
Cheryl Fernandez-Versini won't move to France
Cheryl Fernandez-Versini doesn't want to move to her husband's home country of France. The 'X Factor' judge, 31, who comes from Newcastle, is adamant she won't be relocating any time soon to suit her new spouse Jean-...
Read more on Celebrity Balla
 
Lance Bass sets wedding date
Lance Bass has set a date for his wedding. The former *NSYNC singer and his partner Michael Turchin, who have been dating for two-and-a-half years, are to tie the knot on December 20, 2014, a representative for the...
Read more on Celebrity Balla
 
Nepal avalanche toll reaches 39
Kathmandu, Oct 18 (IANS) At least 39 climbers died while hiking on a key Nepali route after it was hit by a major snowstorm and avalanches earlier this week, BBC reported Saturday citing officials. Over 350 stranded...
Read more on Politics Balla
 
Jake Gyllenhaal says society is complicit in 'nightcrawling'
Jake Gyllenhaal says almost everybody in society ought to relate to his new movie 'Nightcrawlers'. The eagerly-awaited film concerns those people who monitor police scanners and then race to crime scenes to film eye-...
Read more on Movie Balla
 
India eves look for first win in AFC U-16 qualifiers
Dhaka, Oct 18 (IANS) India will hope to register their first win of the 2015 Asian Football Confederation (AFC) Under-16 Women's Championship qualifiers when they take on hosts Bangladesh in a crucial encounter at the...
Read more on Sport Balla
 
Moyes mulling return to management
London, Oct 18 (IANS) Former Manchester United manager David Moyes said that he is ready to revive his managerial career six months after being sacked by the 'Red Devils'. "I am ready to return. I have enjoyed the...
Read more on Sport Balla
 
Ebola fears loom over Ghana hosting AFCON
Accra (Ghana), Oct 18 (IANS) The Ghana Medical Association (GMA) cautioned the government Saturday against hosting the 2015 African Cup of Nations (AFCON), despite a request by the Confederation of African Football (...
Read more on Sport Balla