The Comeback Of China’s Ghost Cities And Why Global Investors Should Care

“By 2020, China hopes to move 100 million people from the country’s farming regions into cities. By 2026, it hopes to move 250 million.”1

That was early 2013, when 60 Minutes ran a story about China’s ‘Ghost Cities’ as a sign of a massive build up in unused and unneeded housing.

Since then, this story in ‘The Globe And Mail’ describes how a lot of excess capacity of housing has actually been filled up in China’s third and fourth-tier cities, where the wages and purchasing power are much lower.

Why should you care about some third and fourth-tier cities in China?

Because China represents the second largest economy in the world. Even at slower than reported growth rates, it accounts for a large chunk of global growth. Whether we like it or not, we are global investors in some form or fashion. So if there’s a banking crisis in China, for example, it’s not a good thing for the rest of us. When the housing situation improves, that’s only a positive for China and global investors.

Wait – why isn’t the financial press reporting this development?

Simple. The financial press knows good news simply does not sell. They love stories that promote never-ending fear and gloom, which makes it very difficult to ever have confidence that the world is not about to end.

You know better. So does the team at FFP.

We can separate stories that peddle hype and fiction from the information we live and breathe as fiduciaries every day. With that information in tow, we can then help chart a course for the long-term that revolves around your best interests. Not the kind of news that can cause knee-jerk reactions to investing – also never a good thing.

Let’s talk more about it at 630.780.1534. If you like what you hear, we’ll get a date on the calendar so you can bring your financial statements for us to review at no cost. Because, after all, you deserve a world without bias.

Fiduciary Financial Partners, LLC is a Registered Investment Adviser. This blog is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Fiduciary Financial Partners, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Fiduciary Financial Partners, LLC unless a client service agreement is in place. 

 

1 http://www.businessinsider.com/heres-chinas-big-plan-to-move-a-population-the-size-of-the-phillippines-from-farms-to-cities-2015-7

 

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