As a follow up to Vice President Biden's remark that there are somewhere between 30 to 50 million vacant apartments in China, Brian Shelley sends along a link to this video clip on China's ghost cities and notes that at the 5:40 mark of this video, the number of vacant apartments in China is reported at 64 million.
What's likely going on here is that the apartments were built by local governments, thus they are not reflective of market demand in any sense. These apartments would sell if the prices were marked down dramatically. Simple supply and demand economics tells you that, but local government officials, unlike private developers, will just sit on them and let them rot away rather than mark them down and take a loss.
A 64 million apartment vacancy problem is a big enough problem in itself for China, but it is likely reflective of many parts of the Chinese economy, where the government has played a major role. In other words, the GDP boom that is hailed by many, like Henry Kissinger, may be a huge facade.
The sad fact is that China never went into a full free market mode. Instead, government control is distorting what could have otherwise been impressive economic growth, after the shackles of Mao were thrown off. It looks, though, like China is really one big grand mess, with only pockets of thriving private sector activities.