23-04-2013, 10:53 AM (This post was last modified: 23-04-2013, 10:55 AM by sgd.)
An economy as big as china is not so simple and has to move in stages. How do you go from a backward economy to a developed economy and bring 1.3 billion people with you and feed them all at the same time? Currently the development we are seeing is only at the coastal cities.
So of course in the first stages which was the past 3 decades they focused a lot on manufacturing which brought a lot of jobs. The next step is to improve people's livelihoods by spending heavily on infrastructure building roads rails electrical/water grids which later will attract foreign investment.
But for a country the size of china this spending will cost mountains and mountains of money just see how much building railroads alone have cost $300 billion and counting, what will building other infrastructure going to cost? So the only way to raise the money they need to finance spending is by further privatization of government assets.
Just like how the japanese the british did it using roughly the same tried and tested way raising money thru privatization and using the money to finance government spending. Of course this will take time to move at it's own pace not 3-4 year affair where you see prices rise and crash.
So what I see a lot of 3rd and 4th Tier cities are still not yet developed, not too late to go out there and buy a villa.