The Telegraph recently ran the story "Hedge Fund Manager Mark Hart bets on China as the next 'enourmous credit bubble' to burst"; Below are three of Mark's more important points on China's housing situation:
1. "China has consumed just 65pc of the cement it has produced in the past five years, after exports. The country is currently outputting more steel than the next seven largest producers combined – it now has 200m tons of excess capacity, more that the EU and Japan's total production so far this year."
2. "An excess of 3.3bn square meters of floor space in the country – yet 200m square metres of new space is being constructed each year."
3. "The average price-to-rent ratio of China's eight key cities is 39.4 times – this figure was 22.8 times in America just before its housing crisis."
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It seems excess liquidity is wreaking havoc on the Chinese economy and it is in danger of overheating.
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