Correlation is not necessarily causation, but, I do expect that when the story is finally told on the Chinese misallocation of capital, a lot of it will be due to overinvestment in real estate. According to the first link, India is also overindulging.
1/12/2012 03:11:08 am
How long can Beijing keep this up? The coastal regions of China continue prosper through trade and the interior is being filled with empty cities. The cities that have the factories and the ports will find their interests fall closer with the western powers than they do with the central government's. Eventually the central government will either need to clamp down on the coastal regions, as Mao did, or the coast will fragment away from Beijing's influence, like what happened after The Opium Wars.
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