The Most Expensive Land in China

I read about a large land transaction in Shanghai, hitting a high water mark in price per square foot (or square meter, if you prefer).

The site is in Xiangwan, in the north section of Shanghai. I'd been there, but it wasn't remarkable, so I decided to visit it again.

According to the China Economic Review, "the land cost equaled RMB12,500 per square meter. That is each apartment costs RMB12,500 per square meter before the block is cleared." At my most recent trip to the bank to change money, that would equal $1,671 PER SQUARE FOOT for the land cost component of the final apartment construction cost! That's not a typo.

So this is what I came here for. What's going on? Are there enough consumers in China to buy apartments that will cost five thousand dollars a square foot and up? Are developers using good sense? What kind of market studies do they do? I must admit, I'm impressed by the level of consumer life in Shanghai. I didn't know that Chinese people live so well. There are dozens of huge A-class shopping malls around, filled with businesses, few or no vacancies, and obviously surviving selling brand-name goods at full price. There's a big story here, economics-speaking, about creating a middle class that compares favorably to American demographics.