Just a few years back the suggestion that China’s property market looked like a bubble was met with derision by a cadre of China bulls. You remember the arguments, don’t worry about those empty buildings, millions of Chinese are moving from rural areas and they need somewhere to live. Never mind that they will be earning two dollars a day and can’t afford the rent let alone the cost of ownership of a $60,000 apartment. Thankfully today those views just seem plain silly, ghost cities are not just some urban legend or one-off anomaly, they are everywhere in China as evidenced in this recent piece on 60 minutes. This will not end well.

We often hear allegations that Chinese economic numbers are fudged. It’s hard not to jump on that bandwagon when you see how the Chinese numbers come out exactly as the central planners said they would, for example the carefully engineered slowdown in growth to between 6- 7% in 2012. Whilst I have always been skeptical of the numbers, I don’t want to repeat the same conspiracy theory arguments of manipulated numbers without evidence. In the clip below, Gordon Chang points out the discrepancy between export numbers reported by China and the import numbers of other countries in this case Korea. Whilst it may not be a smoking gun it sure does raise a red flag.