Covid-19 in China: the pandemic exacerbates the speculative mechanism in residential real estate
One of the striking effects of the Covid 19 pandemic has been the dramatic increase in the disconnection between finance and the real economy in the United States and Europe. In China there is a similarly growing disjuncture between house prices and economic fundamentals. Both cases show a process of asset inflation driven by a frenzy of investment in a context of deflationary pressure. But the comparison ends there, because the dynamics of real estate investment in China respond to the logic of a sui generis[1] capitalist regime that has placed the extraction of land value at the heart of its economic model.
