Ruchir Sharma is head of global emerging markets at Morgan Stanley Investment Management and he has written a major article on the growth of China.
His opinion seems to be that China has simply grown too big to keep expanding at the 10% rate it has sustained for 30 years, and is likely to slow to 8% at best next year and for the foreseeable future.
He writes: For the first time since the Chinese housing market was fully privatized in the late 1990s, a coordinated real-estate downturn has set in across all major provinces. The feeding frenzy of rising prices and increasing demand has given way to a vicious cycle of falling prices and slowing demand.
Housing is increasingly unaffordable, as property prices doubled between 2000 and 2007, and authorities began raising interest rates last year in an attempt to prevent overheating.
Still, for much of this year, developers have continued building with abandon. . . .
Now there is widespread anecdotal evidence that a price war is breaking out from Beijing to Shenzhen.