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Zombie Apartments: Manifestation of China Economy in Deep Trouble

May 7th, 2019

The trade war between Washington and Beijing tends to obscure the darkest manifestation of a looming economic danger for China. Though in past years much commentary has been offered on China’s “ghost cities,” the implications been largely glossed over. But they shouldn’t be.

In China’s major urban centers there are currently 65 million unoccupied apartments. This reflects more than 20 percent of all homes in China.¬† Taking into account that housing construction and its related industrial activity are responsible for one third of all recent GDP growth in China, building zombie residential apartments are not only a non-viable long-term economic¬† policy; this unsustainable development model will eventually have to come to an end.

When that occurs, the ramifications for President Xi Jinping and the leadership in Beijing will be inevitably dire.

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