Our hosts are lovely people. She is a doctor (GP) and he runs a real estate investment fund. So yesterday as we were waiting for our wives we spoke about investment in real estate and other economic issues. He was surprised to hear that I had once been a fund manager. I told him that after my health scare we wanted something less stressful, and farming is unsexy and surprisingly very profitable.
He then knew some of our stories from his wife and my blog. He asked me if I was exaggerating the China issue with owners/managers leaving/selling their mainland China businesses.
I had to tell him that I had no first-hand knowledge. The Peter episode was information he got when he called "competitors" in the City to warn them to be careful when travelling to China. The City (especially on the buy-side) is a small community, so over two decades today's competitors were once colleagues and vice versa. Twice Peter was told by other City fund managers that they too had noticed this strong and accelerating trend. It was Peter who told me how the Chinese were diverting profits offshore by transfer pricing. Peter told me about the visas and the Taipei exit route.
Our host then told me an anecdote. In 2018, while travelling in China and had the opportunity to visit several empty buildings, that were 100% sold to investors. The builders no longer had any interest in the buildings.
He was appaled by the build quality he witnessed. He said that the finished buildings (no lifts, windows or electricity) were all in bad disrepair, but worse was the engineering. He said the concrete appeared too thin, and there were too few support columns (he said he could feel the vibration). He said that he's not a surveyor but to him, as a real estate investor, these buildings should all be demolished. Everything in these buildings was wrong. He said you could already (after four or five years) see the concrete failing and the rebar appearing (he said every time he saw a piece of rebar, it seemed too thin and was poor steel quality as it was flaking as if it was a 30-year-old rebar).
In his opinion of the four buildings he "inspected" all of them had a negative value since it would cost money to demolish them.
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