China -They Are Racing Past US

I have just returned from an 8 day trip to several major cities in China which most of you never heard of, but which are far bigger than new York, and are the center of the action in the near term. Chongqing and Chengdu are 32 million and 12 million population. For real estate developers or investors these cities would be incomprehensible as they were to me. One example. Chongqing is bisected by two major rivers. They have 21 bridges now. Traffic and rail requires expansion of the bridge capacity so at the moment they are building eleven more. Yes eleven and they are each like the George Washington Bridge or Tappan Zee bridge. Wrap your brain around that. They did not wait for Governor Cuomo to decide this or that. They have a 5 year plan which requires the traffic to flow well so they just did it as part of the master plan for the metro area.

When you stand on a hill and look over the city-not easy through the dense smog- what you see is a forest of cranes erecting 20-40 story apartment and office buildings and hotels. Not one here and one there, but 40 story buildings one next to the other all over the place. There are more cranes at work in Chongqing than possibly on the whole east coast of the US. Even if I enclosed a picture you could not conceive what I am talking about. It is breathtaking. While some say it is a bubble in real estate in China, what they fail to understand is that those empty condos are all sold.  In China land has been the store of wealth and the savings for hundreds of years. There is not a functional stock market for the average Chinese. There is no bond market nor commodities market for them to invest in. There is only real estate. So they buy condos.