Niall Ferguson (he pronounces it “kneel,” by the way, so all you pretentious snobs can drop that ridiculous “Nile” business) wants no part of the China bandwagon. In a Daily Beast column about his recent travels off the beaten track in the PRC, Ferguson notes China’s astounding progress — but focuses on a national real estate bubble that, he thinks, could be more destructive than our own. Too skilled a navigator of the shoals of punditry to make hard and fast predictions, Ferguson describes the frenzy of apartment construction throughout the country and concludes:
With inflation above 6 percent and the stock market down, the new Chinese middle class has gotten in on the act. An unknowable proportion of these new apartments have been bought as investments by people who already own one or more. With new-property prices up about 20 percent in just two years, who can blame them?
Sound familiar? Yes, this looks a lot like a real-estate bubble—with Chinese characteristics. As for debt problems, Chinese bank loans were 97 percent of GDP in 2008. Now they’re at 120 percent.
All of which makes me wonder if China’s recent gloating at our misfortunes might just prove a tad premature.