There is a housing bubble in China the likes of which the world has never seen, which electric car company NIO (NYSE:NIO) is taking advantage of in a big way. China now has 65 million empty apartments, valued at some $65 trillion, housing priced too high for people to afford. Meanwhile, NIO stock is affordable after almost halving since its September 2018 IPO.In a market economy, China's apartment prices would fall to meet the market, but those who've bought at these prices protest any drop because adjusting values to the market would destroy their wealth.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut if you can't buy a house, you might buy a car. This has been fueling Nio, described by some as China's Tesla (NASDAQ:TSLA), which beat its own estimates and delivered 7,980 of its seven-seat ES8 sport utility vehicles during the fourth quarter, fueling a rise in the stock and even getting our own James Brumley excited.I disagree. The Bull CaseThe bullish case for NIO stock is fueled by the fact that a company called JAC Motors is making its cars, giving it scalability, and the Shanghai-based company is keeping prices low by using third-party chips from Intel's (NASDAQ:INTC) Mobileye unit. * 7 Financial Stocks With Accelerating Growth The cars seem well-made. One has been driven to the top of an 18,000-foot-high glacier in Tibet, to demonstrate its ability to work in cold weather. The company recently sold $650 million in convertible bonds, at 4.5%. Nio stock opened for trade February 19 at $7.43 per share, giving it a market cap of $7.6 billion. NIO stock is the sixth-largest holding in the 110-stock portfolio of Invesco Global Clean Energy ETF (NYSE:PBD).CEO William Li has also made himself a Musk-like hero by giving a big hunk of shares to a user trust, while retaining the voting rights. Americans admire Musk for his engineering determination, Chinese admire anyone in their go-go economy with a thought to the little guy.So far in 2019 Nio shares are up over 16%, although they're still below where they traded in the giddy September post-IPO days, when they went for as much as $13.80 each. What Can Go Wrong?But there are a lot of things that can go wrong here.First, the company isn't due to report that "great" fourth quarter until March 5. Until then you're only looking at third quarter numbers, which showed sales of about $20 million on that $7.6 billion market cap, with a loss of more than $1.4 billion. If the losses can't be narrowed, Nio will have a hard time getting through 2019, but you're assuming they can be.The car's third-party electronics can also be embarrassing, as when a Nio was stuck in Beijing traffic for an hour doing a software update. Just as Tesla created competition from other automakers, so Nio is getting new competition from Tesla in the forms of a lower-priced Model 3 and a new factory in Shanghai.Then there is that property bubble, which could collapse at any moment, taking 80% of the country's wealth with it and, perhaps, sparking serious political and social unrest. * 9 U.S. Stocks That Are Coming to Life Again Four Chinese housing companies now have bonds rated at CCC+ or below -- or just above junk status -- and a crackdown on the "shadow banking" sector, where money is raised outside the regulated banking system, is making things worse, because until an apartment is sold it must continue to be financed. Bottom Line on NIO StockChina's economy is getting a 1929 feel to it, and a collapse of its debt mountain is a real systemic risk that could spill into the rest of the global economy.Much of China's reported economic growth is created by these unsold apartments, and if that part of the economy collapses, people won't have the money to buy snazzy electric cars either.This might be the time to tap the brakes not only on Nio stock, but on all your Chinese investments.Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Hot Stocks Leading the Market's Blitz Higher * 7 Strong Buy Stocks With Over 20% Upside * 5 Growthy Stocks Trading Below 15X Earnings Compare Brokers The post Nio Stock Logic Plays On China Car Buying Instead of Unaffordable Apartments appeared first on InvestorPlace.