Maine Log Home Builder Wins China Contract~

Katahdin Cedar Log Homes, a manufacturer based in Oakfield, Maine, has inked a deal with a Chinese real estate developer to supply log home kits for a high-end development at a man-made lake in Chengdu, China, according to a report from Maine Public Broadcasting Network (“ Maine Log Home Builder Wins Contract to Sell Homes in China,” by Tom Porter). “Parcels of land around the lake will be sold off to the wealthier members of China's growing middle class, who can then purchase their own Maine-made cedar log dwellings for the equivalent of $375,000,” MPBN reported. Syswin, Inc., one of China’s largest development companies, selected Katahdin over a dozen competitors, according to the MPBN report. Katahdin will package and ship the houses with labels and instructions for assembly, company president David Gordon told the network: “Everything's labeled and numbered and has a place to go, so you just follow the blueprints and pile it up according to the blueprints.” China’s surging real estate industry has also made waves on the West Coast: Lumber exports from British Columbia and from Washington, Oregon, and California to China have been setting records recently. “At nearly $1 billion so far this year, the value of wood exports to China was more than twice last year’s level for the same period, and are expected to continue to increase over the next five years, although at a slower pace,” The Vancouver Sun reported last week (“ Export diversity to double profits for B.C. wood producers,” by Darah Hansen). “Approximately 30 per cent of B.C. softwood lumber exports has gone to China in 2011, accounting for more than 95 per cent of Canada’s total exports to the country.” It’s clear that China’s becoming a bigger player in world lumber markets, as it is in other global resource markets. What’s not so clear is whether China’s housing boom, supposedly based on a rising middle class, is really sustainable. According to some reports, what’s happening in China is not a boom, but a government-stimulated bubble — one that dwarfs America’s recent housing bubble, and that could pop even harder. Chinese developers are creating brand-new communities all over China. But often, the houses go unsold. Last year, a 15-minute report from Australian TV network SBS took an in-depth look at China’s over-supply of unoccupied high-end housing (“ China’s Ghost Cities,” by Adrian Brown). And where the U.S. has thousands of housing developments with foreclosed or never-sold homes in them, America has nothing like this: An entire city, planned and built to hold 12 million people, where three quarters of the city is empty. In an eerie ride, Australian reporter Adrian Brown took a boat trip along an artificial canal through a giant Chinese shopping mall that remains almost entirely empty, where almost the only people to be seen were a few lonely maintenance workers paid to keep the place from crumbling into disrepair. Brown drove through empty streets and toured vacant high-rises, viewing a depopulated, or never-populated, landscape of fully built, but wholly unused, infrastructure and housing. The problem? China has the means to invest in these advanced properties, but the population lacks the income to purchase them — or even rent them. Against that backdrop, are sales of lumber or pre-fab “middle-class” homes to China a viable long-term strategy for American companies struggling with our own employment, income, and financing issues here at home? That question remains unanswered. But for now, at least, China has the dollars to buy American — and for American and Canadian exporters, a customer is a customer, and a sale is a sale.