China's Malls Beg for Shoppers

China’s mall explosion may mimic US mortgages
By Jonas Oransky,  Newser Staff
Posted Aug 28, 2007 1:44 PM CDT

(Newser) – The malls keep going up in China, but the number of mallrats isn't keeping up with them. Indications abound of retail real-estate bubble, the Christian Science Monitor reports, but warnings to banks about loaning to malls aren’t halting new construction. Consumption is only 37% of Chinese output—half the US rate—as citizens with little welfare to rely on save up instead of spending.

The country’s economy is growing at its fastest rate this decade though, and builders not only ignore signs of overheating, but go increasingly  for broke. “Every developer wants Louis Vuitton and Prada in their retail space,” said a Chinese real estate expert. Inexperience and the lure of prestige projects continue to ensnare loaners—and the situation promises a downturn to rival US mortgage woes, the Monitor predicts.