Via Pete Green at HPC Surivivors, from The Telegraph:
Growth in Chinese manufacturing activity slowed in August, two closely watched surveys showed on Monday, losing momentum as a declining property sector and waning stimulus effects weigh on the world's second-largest economy...
Analysts said the result indicated China's economic recovery was being stunted by problems in the property sector - where new home prices posted their fourth consecutive month-on-month decline - as well as the weakening impact of stimulus measures taken to boost growth.
"The weak PMI data suggest that China's shallow growth recovery has started to lose momentum, likely because of the ongoing property market correction and a decline in the efficacy of policy easing due to structural problems in the economy," economists at Nomura International said in a report.
So they hammer the same point home three times in a row: the health of manufacturing depends on house prices going up, presumably in a straight line to infinity.
Weird.
Land rents are not an input or a cause of anything; they are merely a balancing figure between value and costs. If the real economy is doing well and town planners are doing a good job, then land rental values go up. Land rents are not a component of GDP, they are a way in which GDP is distributed, just like tax and welfare payments (privately collected land rents are simultaneously a tax on those paying them and welfare for those collecting them).
And land prices (or house prices) are like a parasite on the real economy, the real economy grows and land prices go up, thereby soaking up more and more of output until the tipping point is reached and the virus starts severely weakening the host.
That's what's happening to the Chinese economy now.
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