I believe this is true. The development in China over the last 10 years has been insanely fast, and the speculation in real estate has been massive. Local governments simply keep building and building, and many of these structures are well below occupancy. Infrastructure is being built at an astronomical rate without real demand. The only demand here is speculation. It's like Dubai.

I hate to say it, because I love China and go there a lot, but the country has a deep culture of corruption. My personal view is that the absurdity of communism forced everyone to learn to live two ways: you present a public way, and you practice a private way. This corruption is diminishing, but it is still ever-present. Regional governors lying to the gentral government goes way back. It was a primary cause of the famine following the Great Leap Forward:

http://en.wikipedia.org/wiki/Great_Leap_Forward#Famine

Although actual harvests were reduced, local officials, under tremendous pressure from central authorities to report record harvests in response to the new innovations, competed with each other to announce increasingly exaggerated results. These were used as a basis for determining the amount of grain to be taken by the State to supply the towns and cities, and to export. This left barely enough for the peasants, and in some areas, starvation set in. During 1958–1960 China continued to be a substantial net exporter of grain, despite the widespread famine experienced in the countryside, as Mao sought to maintain face and convince the outside world of the success of his plans.

There is a real absurdity to that economy, and a reality check will come a some point.