At present, the Chinese economy is a combination of free markets and bizarre central planning. These ghost cities are heavily financed by local governments and the money that investors use to buy the properties is pumped about by China’s central bank, The People’s Bank of China. So much money has been pumped out by the PBOC that price inflation is starting to cause civil unrest. The PBOC and the government of China are trapped, the only way they can prop up the bubble is by more money printing, but that will cause price inflation to accelerate even more. If they stop printing, the real estate market and stock market will crash. It is possible it will it could result in the greatest crash in economic history.
At about 3:20 the reporter states that this is unlike our “market driven economy”, not true! Our housing bubble burst was caused by our central bank just as their housing bubble to be is being caused by their central bank now. When the government controls the economy the economy produces things people do not need and cannot afford, and this ruins the lives of the people the economy is supposed to serve.