65 Million Things You’re Not Hearing About China Trade War

China’s been playing hardball with the U.S. over trade talks. There’s a good reason: they’re gunning for the title of Top Global Economic Power, above the U.S. and other players.

They’re embracing the short-term pain to win the long-term fight. But…

They have growing problems, with slowing growth and exports, and we’ve heard much about this lately from Main Street. But those are only symptoms. Deep down, they have a demographic problem, an overinvestment-in-infrastructure problem, and a real estate problem. Today, let’s talk about that last one.

recently talked about Japan’s housing crisis. There, 8 million homes stand empty (that’s 15% of their market)!

Well, compared to China, Japan’s real estate problem is a minor crack in the foundation. In China, 65 million homes stand empty! That’s 22% of all urban homes there.

And it’s the worst in tiers 2 and 3. Check it out…

(Click on image to enlarge)

A quick note on the Chinese city tier system: While the Chinese government doesn’t officially recognize this system, it’s become a popular way for people and businesses to differentiate between cities, which reflect differences in consumer behavior, income level, population size, consumer sophistication, infrastructure, and so on.

Tier 1 cities are the most developed in the country, with the most affluent and sophisticated consumers. They’re crammed full of people, and as urban metropolises, they have a huge economic, cultural, and political influence in China.

Tier 1 cities include Beijing, Shanghai, Guangzhou, and Shenzhen.

Now look back at that first chart. See how Tier 2 and Tier 3 cities share the largest proportion of empty homes? That’s where the greatest overbuilding has been as Tier 1 cities run out of space to build.

That’s a problem!

But Is China’s Problem Worse than Japan’s?

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