The situation in China is much worse than originally thought. The largest property market in the world is set to collapse and the ramifications will impact the entire world.
We’ve been discussing China’s economic issues for years. Recently this was even discussed with Steve Bannon on The War Room.
We now have information that the situation is worse than we thought. For starters, the China property market is the largest market in the world at $62 trillion USD per a recent report from Goldman Sachs.
The property market in China is nearly 30% of China’s GDP compared to 6% in the US.
Like we’ve been saying for years, China’s property market is way overbuilt. It is similar to the 2008 housing crisis in the US. The Chinese way overbuilt unneeded properties. The property glut in China is so huge that 15 massive properties were recently taken down at the same time because they sat for 7 years unfinished.
Property was the only way to build wealth in China since the stock market is new and not trusted. So as people invested, properties were built, but then the builders began to use the deposits on other activities. It became a Ponzi scheme – some say the world’s largest (but the US Social Security system’s unfunded liabilities are estimated at $96 trillion.)
Goldman Sachs has estimates on the status of China’s property market’s impact on GDP and the worst-case scenario brings China’s GDP down significantly. However, sales are new starts are currently down significantly worse than the estimates.
Much of this recent information comes from the video below which is well worth watching.