The New Yorker (September 6)
Is China going the way of Japan? Similar bubbles and certain excesses seem to indicate China may be headed for a fall. Chinese real-estate tycoon Huang Nubo unveiled plans “to buy seventy-five thousand acres of Iceland.” The “weirdness” of this recalls similar weirdness during the height of the bubble, such as a 1989 plan by the head of Nomura Securities to make California a joint yen/dollar currency zone. That was three years after “the value of the nation’s real estate doubled in a single year.” It doubled again in 1987, making Japan “the world’s largest creditor, holding thirty percent of U.S. debt, and … home to the world’s ten largest banks, with a stock exchange bigger than Wall Street.” By 1993, it was all over. Does China’s “Iceland moment” signal the end of their bubble? Or “Will it be simply a quirky milestone on the continued ascent?”
Tags: Bubble, California, China, Iceland, Japan
