Market Capitalisation of Beijing = GDP of the United States?26 January, 2011, 18:50. Posted by Zarathustra
Tags: Beijing, Bubbles, Fun, Real Estate, United States
How expensive are land and real estate in China? According to some, to buy the whole of Beijing Land will require an entire US economic output.
It was reported that in this week’s China Economic Weekly (cover story), investigators looked at the land transactions last year, and concluded that at current market prices, buying the whole of Beijing will require one-year worth of GDP of the United States. Or put it in another way, if you can sell the whole of Beijing, you can have enough money to buy one-year of the entire economic output of the United States.
Of course, this kind of comparison should never be taken at face value, and Ni Jinjie has quickly point out that the statistics was misleading. But no doubt that China’s real estate bubble is a serious concern for every China watcher. Even without this report, we know from countless anecdotes that China’s real estate bubble is one of the largest (if not the largest), from ghost mall to ghost cities (more examples in my own China forecast for 2011).This report suggested that at the peak of the Japanese real estate bubble, selling the whole of Tokyo could also buy-out the United States. To me, it is an absolute sign of warning, and there are no bubbles that would not burst.