With everyone sitting around waiting for the FED, here’s an interesting distraction. Today’s infoporn starts with an intriguing graphic in yesterday’s WSJ:
A recent article in the Economist was brought to our attention
(Thanks, Larry!) that looks at the burgeoning property laws in China.
There can be little doubt that this is a very significant move by
The creation of mortgage products is something new in that country.
This is likely a transition from Communism towards full bore
property rights. This development does not mean the end of centrally
planned economies, but it is a substantial move away from
collectivization, vis-à-vis establishing property rights.
The Economist notes:
"Clearer, enforceable property rights are essential if China’s fantastic 30-year
boom is to continue and if the tensions it has generated are to be managed
without widespread violence. Every month sees thousands of protests across China
by poor farmers outraged at the expropriation of their land for piffling or no
compensation. As in previous years, placating those left behind in China’s rush
for growth has been a main theme of the NPC.
In the cities, and of greater importance to the decision-makers
pushing the law through, a growing middle class with its wealth tied up
in houses wants to pass these assets on to their only children. These
people are anxious about the security of their property and, like their
fellows in the countryside, are becoming more assertive. In other
countries the emergence of this group as an important political
constituency has been followed by an unstoppable drift towards greater
The entire concept is fascinating: China and India, two nations of
savers, both export-dependent economies, thinking about developing more
of a consumer culture.
As the old saying goes, be careful what you wish for . . .
For India and China, Credit Poses a Challenge
U.S. Mortgage Woes Highlight Pitfalls Faced
By Two Asian Nations’ Fledgling Consumer Lenders
JAMES T. AREDDY in Shanghai and ERIC BELLMAN in Mumbai
WSJ, March 20, 2007
Property rights in China: China’s next revolution
The Economist, Mar 8th 2007