I write this down as a record for the future, and also as a cheeky note regarding my personal predictions . I believe the two most significant forces in China right now are the accelerating negotiating power of the formerly underpaid worker and their subsequent rising wages, and the overheating real estate market. I have a friend, who I doubt is unique, who owns eight separate properties as an investment, fully furnished, without anyone living in them. If the rising wages of the working classes does not eventually turn into rent-paying tenants of this style of house, there is going to be a massive -pop- as this bubble bursts.

Sadly, even adding up the math of these apartments makes that seem unlikely. I’ve always understood that the rule of thumb for rent is that monthly rent=the value of the space paid over ten years, give or take. Current rental prices and prices per square meter would take eighty years or more to reconcile, according to rough math done while talking with friends. Such a gap needs to be fixed, but one method seems unlikely (rentx8) while the other seems disastrous (home prices dropping 7/8ths).

I hope I’m wrong. The Chinese certainly have more control over home prices than we do, which might prove the solution.