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I'm a certified concrete inspector and experienced materials inspector. I can't give an inspection by sight but I sure as hell can give an opinion based on what I see. I was in china and there were high rise condos that were going up near where I was staying. I went over just to watch what was going on because of my experience in the construction industry. The concrete that I saw was incredibly runny (very high slump) and there is no way that I would want to live in anything constructed from concrete that looked like really runny oatmeal. The poor quality is just insane.

When the news broke about Evergrande literally the first thing I thought about were those videos you guys made a couple years ago calling the Chinese real estate bubble. Was really looking forward to this follow up; thank you.

Italy got 1000 year old stone houses that people still live in. Maybe we all could learn something there.

This is absolutely true. I lived in Wuhan for 5 years and journeyed all over China and saw the same thing. I lived in a villa (or a McMansion as we called it) and once saw a 2nd floor patio collapse across the street from us. The front of the complex had a magnificent fountain at the front and never worked once since the day most of the units were sold. I worked for a large building materials company making cement and we were astounded when market research showed that the average lifespan of a building in China was only 20 years. That’s good for our business but where are all these people going to go when their apartments are falling down or being torn down? This is an across-the-country time bomb ticking now.

"People in China believe there's no way property prices can ever go down." That's how you know it's a bubble. When people get angry when you talk about systemic risks. That's true for property, stocks, gold, crypto, technology, tulip bulbs, and everything else.

My uncle who has built 2 personal properties in the US is building a home in the mainland. And he's had to step back and let the wife manage it because the things the contractors were doing drove him insane. Sometimes the contractor would show up to his property with no tools, or using the wrong materials, lack of common sense etc. Also apparently central heating and cooling does not exist in China? They had to redo the entire floor plans just so his house could have modern, 'western-style' HVAC. The neighbors would call him and his wife stupid and senseless for stabilizing the soil with gravel and cement before paving the driveway. These people are arrogant farmers with no real knowledge of what they are doing.

I had first hand experience seeing this in China. Specifically in the surrounding areas of Shanghai. Taking the fast speed train, 300kph train around the city. You would see these clusters of Buildings out in the middle of nowhere. I had the chance to visit one of these ghost cities. They are put up over ancient farm land. The people that have spent hundreds of years farming the land were given 4 Apartments to sell as payment for their land and one to live in. And yes i visited one of these cities. Well, there was no heat, no hot water. Apparently south of the Yellow river, they were not required to install heat. this extends to Hotels etc. It was 50ish deg F and everyone was sitting around in winter coats. Cooking with fire outside. They had no way to pay for Gas or electricity to run the Apt they were given. It was very troubling to see. All these people displaced and their lively hood taken away with no way to make a living. When i asked about it. I was told the Chinese economy was based on how many buildings were built each year, or concrete poured. I looked at my wife and said this economy will collapse in less than 10 years. It was astounding to see. You would be on the bullet train and see a cluster of buildings in the middle of no where, 2 min another cluster etc and so on. And also, the train was basically empty. Most all were unless you were probably within 30min of the main City. Dont get me started on the main Cities. Inside them where "Tourists" go. Looks amazing but if you looked close enough eg. the sidewalks were falling apart, cracked, loose tiles etc. It was as if no one did any maintenance. And this was downtown Shanghai. You would turn the corner down the street away from the Tourism and it was a shadow realm. I know there are Cities like this everywhere. But this was on a whole different level. I'm not trying to act like something similar doesnt exist in Cities like NYC Detroit etc. But unless you have been to China you really cannot argue this. I have been there 5 times to different provences and Cities. The best place i have been was Xiamen. That is a coastal college town, but it was the most "Normal" and i had a great time there. If anyone wants to know more feel free to ask me. I spent a bunch of time in China and Taiwan.

Interesting video, I talked to a chinese foreign student once and he was shocked how the USA had old building and cars and was proud of how in China everything was "new". Now I know why everything is new because the construction is so bad they have to keep building and rebuilding.

Dang. 3 years of wear on those buildings looks more like 30-50 years with zero maintenance on a properly built structure.

In 2010, I went to Pinghu for work (2 hours south of Shanghai), and we did a test-drive event at an abandoned resort right on the ocean. It was less than 5 years old and falling apart. I can't imagine how many villages they bulldozed just to build it. Makes you angry.

My nephew used to live in Qing Dao in a brand new 3 bedroom apartment which he was paying $150.00 a month. My son went to visit him, about 6 months after my nephew moved in, and it was already falling apart. He said in the lobby and halls there were holes developing in the walls, and inside the holes it was stuffed with newspaper. My son saw a repairman stuffing more paper in the wall, and covering it with what looked like plaster. Crappy build, crappy repairs. I had allot of friends living in China back between 2008 and 2018, but fortunately they all got out before everything went crazy there.

"We're not experts in economics" It doesn't take an expert in economics to realize that bazillions of dollars invested in crumbling vacant eggshells must eventually have some kind of repurcussions. In fact, economics experts are pretty much the only people who can believe otherwise.

Some of these properties would be perfect for filming a post-apocalyptic film

When I lived there I observed: an innate unwillingness to maintain properties or any other capital investment; no zoning; no inspectors; no trade standards; no legal penalties; and made guys (Party members) doing whatever they want.

This was very interesting. I've a bit of history in the Vancouver B.C. area and real estate there is so expensive because many Chinese people buy property there and never actually come and live. This has driven the price of real estate out of reach for most Canadians in that area. Market distortions . . . .

When you showed us all that decaying housing in China, both new and old, I asked myself, "How long can a real estate market possibly last, when the houses fall apart in just a few years, and no one repairs them? Here in NZ, I live in a 100 year old wooden home, albeit after massive earthquake repairs, but most of the house is that old. I'd expect it to last another 50 years at least. And NZ homes are considered not to be permanent.

I was at a conference in 2008-2009 where a rep from Lone Star Funds said when he was in China if an agent took him towards buildings that didn’t have AC units in the windows he’d tell them to turn around. No AC means no residents. Speculation has been going on for a long time.

When I was in Chengdu I stayed in a house (actual house, not apartment) in a gated community that had an RMB 8-figure entry price. Even that place has uneven flooring and tiles coming unglued. Then there's Global Center; USD$500M to build and 5 years after opening there were buckets in the foyer to catch the falling water when it rained.

when a wooden house would be more solid than a concrete one, you have a big problem on your hands...

The 2008 financial crisis was set up by similar problems with real estate and lending. A few analysts asked the American banks and lending institutions (before the collapse), "What do your algorithms predict if real estate prices drop, even slightly?" The answer was "Our computer models aren't set up to take that into account." China's present crisis is similar and could lead to a world wide recession again.

I really liked those old videos of new buildings falling apart.

This makes a lot of sense. I had a friend who rented an apartment in the US. The property was bought by Chinese immigrants who later started intruding into the apartment without his permission. He told me one time he woke up from sleep to find them going around on his balcony to take measurements. This was after he had a big fight with them, telling them they were not allowed to go into the apartment without his permission. The fact that they had used a ladder to climb onto the balcony was baffling. He moved out after his contract ended and that situation actually made him look into buying a house.

It’s truly painful to see the waste of resources expended on these blights on the landscape and society. They are worse than worthless as a waste not only the resources on building them but the necessary further resources to remove them at some point in the future, or they’ll just be a dangerous, overgrown wasteland full of traps for the curious.

Who would have thought, starting the wildest kind of capitalist economy in a country led by the most despotic communist government would lead to some kind of contradictions? 🤔

Hey guys, have you heard anything about counterfeit or adulterated cement? I have a friend who recently left China for NZ, and he told me that the last place he lived had poured concrete walls that were just spalling and crumbling after two years because the sacks of cement used to make the concrete were diluted with inert material. They'd look OK when you stripped the forms, but it didn't take long to start deteriorating. Dangerous a hell.

I know a Chinese girl who had purchased a apartment in China before she moved to Australia for study. She decided to stay here and became a Australian citizen. She then discovered she could not sell, rent out or give away her apartment as she was no longer a Chinese citizen. It now sits empty.

Was in Beijing about 3 years ago and drove through one of these concrete ghost towns. Miles and miles of bare 50 story concrete buildings. No windows or doors. Just poured concrete. The whole area was completely abandoned.

I lived and worked in China for years and I completely agree. The Apartment we lived in, the basement had a huge crack in the basement that they have had to fill in several times each year.

Around 2009 a book was published which was titled "This Time it's Different: Eight Centuries of Financial Folly" by Carmen M. Reinhart and Kenneth F Rogoff. It's a really good book which compares various financial crisis going back to the Middle Ages. The authors are still with us. I think future editions will need to be updated to include China's real estate bubble. Many of the previous economic disasters had one thing in common. People; often self proclaimed experts, would claim "This time, this situation is different. Forget the old rules of market valuation. This new economic miracle has little or no similarity to past disasters." They were always wrong. So, it should come as no surprise that the claim that Chinese real estate would never decline in value is also turning out to be false.

I love how everyone thinks someone else is the bigger sucker. Everyone knows it’s a con job but they still think they’ll get out in time.

I don’t often comment. Just wanted to thank you guys for all the videos you are doing to update everyone. You offer so much useful and interesting insight.

Timing is pretty funny, I just had my apartment bought by a new investor and we had a scheduled get together and house tour the same day this video came out. And unlike serpentzas experience, my new landlord actually preferred if I stayed instead because the house was in good condition after 4 years and I've never missed a rent. In Finland a tenant with a good reputation can actually raise the value of the apartment tremendously from the investment standpoint. In other words the value of the building goes up if people actually live in it or use it, as it should be.

When you're young as long as you got internet it's a cyberpunk aesthetic, when you're older it just becomes a shithole apartment.

For the past 2 years I had been recommending over and over to Chinese friends to dump property investments and put their money into tangible stock like semiconductors. However, the herd mentality kicks in... "My friends all invest in property, so it must be great for me to do it too" Now its all about "ooh...why an I having such bad luck? How could I have foreseen this?"

China kind of reminds me of the Mistborne trilogy by Brandon Sanderson, where the whole world is run kind of ham fisted, but roughly staying afloat, until the end of the series where it all just collapses under its own weight.

You guys have much better idea than many of the academic intellectuals about what is really going on in China. Nice work!

I wish the U.S. government would change our laws about selling real estate to non-U.S. citizens. By allowing rich people from all over the world to buy American land, that forces us and our children, grandchildren, to compete at higher prices just for us to live in our own homeland.

I'm in the process of buying a 100-year old traditional Japanese house and it's in better condition than these 3-year old Chinese houses. From the moment I arrived in China (Guangzhou), I've felt like most every "new" building already appeared old and structurally unsafe.

I love how they describe 700 sq ft as "tiny". In London and Manhattan, that would be described as generous. LOL

When i was in Beijing i worked at a school in the middle of a new apartment complex and until they sold every apartment it was great beautiful lawns flowers wonderful streams running everywhere with wonderful fish swimming around but as soon as it was sold fully everything changed grass died flowers died and one day they drained the streams and netted the fish and that was it paradise gone.Take the money and run.

First a ship named Ever Given owned by a company called Evergreen clogs up the Suez Canal. Now a real estate giant named Evergrande is collapsing, taking much of the Chinese economy with it. I think the lesson here is never begin a business undertaking's name with "Ever." Ever.

Hopefully their military equipment is just as crap

I am absolutely loving these videos. So glad I discovered you guys

Wow, I had the same thing where we'd get constant real estate agents knocking with clients trying to come in and see the property. When I asked our "landlord" she told me not to let them in or she'd sue me (empty threat, I think, but we weren't letting them in anyway) - I imagine she wasn't the owner and was subletting it to us, and didn't want it to get sold. These ones, at least, stopped coming after we started getting angry.

I´ve bought property in China. Because the apartments get rotten so quickly I bought it new and sold it 5 years later at 3x the price. The day I bought it I already knew I would sell it. As you guys said the apartment was provided with naked floors, and water pipes (only cold water) sticking out. There was western style toilet though.

You guys are really giving us a unique perspective into this entire thing. It wasn’t really as clear to me before

It's happening here in Australia. The houses going up are getting dodgier and dodgier. The customer has no idea that the "builder" is paying 16 year old drug addicts to putt your house together. Not to mention the quality of materials used

This was in the making for years. I remembered that initial video directly.

This is by far the best video on why Evergrande like situation happened! You guys showed this almost 1.5 yrs back.

It would kill me if I worked in construction having to build something you know isn't structurally sound just to make money and cut cost with the cheapest material that barely holds up against physics.

70 m2 might be tiny for the US but it's actually a perfectly normal size for a 2-bedroom flat in Europe, for example. In bigger cities people live in much smaller flats than that.

This was so good. I wish I have seen it earlier. Thank you guys for your work.👏👏✌

Glad you guys brought this up! It really ties in with all the videos you've done on the shoddy constructions and empty cities.

I live in a house in western india,which was built with lime mortar and bricks,,it is 65 years old,and still more stronger than new cement concrete rcc buildings,, Our forts are more than 1000 years old,and still as strong as 1000 years back

I'm fascinated to hear about "the real China" from a foreigner's perspective. Very insightful, thank you for this.

Excellent insights, thanks for putting up content like this guys! 😊👍🏻

WOW, those abandoned villas literally look like it survived a war. How do those buildings ;degrade that fast?

I know a Brit who bought an apartment to live in Foshan next to Guangzhou, he told me at the time that the price would skyrocket because it was going to be near the new high speed rail station in that big Guangdong project to link every cities around the Pearl River Delta with high speed train every 10 mins like a metro. Little did he realize that the price had already risen the moment it was announced that one of the high speed rail station was going to be near there, and not once it was built. He missed on the initial rise and now the city of Foshan has implemented measures to limit real estate speculation, so his flat is worth less than it was when he bought it LMAO.

Cheers for the vid. Great work as ever.

I used to live in Australia. Lots of Chinese invested there. I came up with the idea of building a building with no finishings, except a block of gold epoxied to the floor. I thought I could sell these out in minutes.

We lived in Shanghai (Pudong New Area) for 4 years (2012-2016) and both of our apartments were crumbling to bits, and they were only 10 years old. They were loaded on the inside with expensive marble and expensive fittings, but the buildings themselves were rickety and cheap.

"You owe me money." "Would you take a parking space as payment?" "Where is it?" "The future..."

That ad read was amazing, I’ve never seen such ingenuity during a yt ad

Thanks for the update 😀

I have been there.. I spend over two weeks traveling by rail, boat, bus and plane. And yes, this is true. I was almost afraid to walk on the streets...not because of the people, who were quite nice, in a distant sort of way, but because of the wiring on the electric poles in the larger cities. I've seen plates of spaghetti looking more organized.

The 2008 bubble happened the same way. People were told "it's a sure thing". Thing is, there is no such thing as a sure thing in economics.

Whenever the Chinese Real Estate bubble conversation comes up I always mention your guys' ride videos. Nothing like seeing someone ride for 20 minutes through empty high rises to drive a point home.

Thank you guys this is great info to understand the situation

Holy crap, that was just a 3-year-old building? Heck, I own a 10-year-old building, never did renovations and it's still as good as new.

If I were walking around those buildings, I'd probably keep my motorcycle helmet on so a piece of material doesn't fall and hit me in the head.

you guys are great! Thank you for your work

Very interesting and informative, good job guys.

I always thought it was interesting that the Japanese-built buildings (from when they occupied) in my husband’s city were known to be the sturdiest buildings in the city. Even the neglected old Japanese buildings were in better shape than the “modern” Chinese ones. I was like, why don’t they just copy the Japanese buildings? He told me that the Chinese people had tried to pave the main street in town, which was cobblestone, also built by the Japanese, and they tried to tear out the cobblestone but couldn’t do it bc it was too sturdy. (They couldn’t blow it up either.😂) So they just paved over it.

Can you guys please do anotther one of these on the Chinese energy crisis?!?! I learned SOOOO much from this video

finally i was waiting for U guys

It would be interesting for you guys to cover the purely financial side of things. Supposedly, Evergrande was offering its employees Wealth Management Products (WMP) which seem similar to corporate bonds, except they offer high rate of returns (~25%). Of course, Evergrande never paid off any of these WMPs that they issued to their employees and now part of the fear is that they will also default on their overseas bonds (as well as commercial paper). I know you guys spoke about the speculative real estate bubble in China, but have you ever known people that bought WMPs? Are they almost never paid back by the company that issued them? Will we see other Chinese companies collapse under their own astronomical debt like Evergrande?

So they build the homes they live in with the same quality standards they do in the manufacturing sector? Consistency guess.

You guys do the most fascinating videos on China I've seen and probably know more about China than most so called western experts who've never even been there. Fascinating. Thanks.

I find your idea of a “tiny apartment” hilarious. Mine is 83 square meters in the Paris suburbs and I consider it a good-size apartment.

Great video once again !!

Dang, you guys called it years ago. I remember watching those videos in disgust. Now it's time to pay the piper.

I've often wondered: Since so many properties were just empty, was squatting much of a problem? Would anybody even notice if it were?

These dudes got balls of steel! I love watching their stuff. Soooo interesting!

Thx for the video!

That is why average Canadians can't afford to buy homes.

I remember the vid, you guys called it! Tofu construction is real.😉

This was a really good video. Thank you!

You guys are my bases of how I look at China..always an experienced format…👍🏼good job guys !!

That video from 2018 I remember watching that when you first uploaded it and I'm still here watching your videos thanks for the years of great content. Stay awesome 👍

18:00 we also had that same exact experience (even looks nearly identical) where the water pools stopped just months later and so basically you had worthless blue-tiled caverns full of rusting sharp metal and litter. I have never seen working outdoor escalators past the 6 month mark and ours also became rusty danger-stairs.

In the US, our market-based economy imposes discipline. In 2008 the real estate market crashed, folks went out of business and were liquidated. This was the correction. Eventually, sanity was restored.

Great content as always gentlemen

This is partially because Pooh wants to go back to 1960s nostalgia and we know how that’s worked out for the economy

This is one of your most interesting videos in a LONG TIME.

Actual reporting. Shocking. Well earned sub.

You two are pure gold 👍

Watched through all the ads-- glad you guys are finally getting some well-deserved ad revenue!

70 m^2 is a decent size. The size of North American apartments just makes everything else look small.

Thanks for your info and perspectives!