China's property bubble is about to implode and the impact will be felt around the world. It will damage the global economy.
The Wall Street Journal says that the Chinese housing market now seems to be in retreat. The figures show that real-estate prices fell 4.9% in April from a year earlier. Last year, prices in those nine cities rose 21.5%; in 2009 as the bubble continued to fuel speculation.
The problem with all this, as The Wall Street Journal says, is that real estate is a foundation of China's phenomenal growth record in the past two decades. China's booming construction, steel and cement sectors depend on it and if the bubble bursts, it will send the Chinese economy into reverse. Given that China is the global economy's growth engine, it will send shockwaves around the world.
When you consider the credit fueled bubble that toppled the US economy in 2008, it's going to get ugly.
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