China’s Real-Estate Bubble

Topics: China, Real estate, People's Republic of China Pages: 3 (1039 words) Published: April 14, 2013
China’s Real-Estate Bubble

China is one of the major economical players in today’s international market. China’s economy is the “seconds largest in the world after the United States” (Joseph, 63). This is a striking achievement due to fact that China is a “developing country”. China has achieved a great amount of success through the collaboration of political and economical regimes. The economical growth in China led to “one of the biggest improvements in human welfare anywhere at anytime” (Kristof, 15). Currently, China is experiencing a real-estate bubble. This eventually will hit a climax, disrupting the real-estate market within China. This real estate bubble that China is undergoing is considered one of the "biggest housing bubble ever created" (Miller, What If the China Bubble Bursts?). This will not only impact China, but can have repercussions towards other nations.

There was a time period when real-estate agencies were "selling everything immediately,” which eventually died out (Wheller, Chinese housing bubble fears grow). Chinese authorizes began to see that the wealthier classes were purchasing homes in China by numerous numbers. This caused a spike in real-estate sales and prices. The political regime began to play a role with the real-estate situation. Chinese authorities were "alarmed by soaring prices and increasing numbers of speculators, have placed limits on who can buy property and on how many homes a person can own" (Wheller, Chinese housing bubble fears grow). The real-estate bubble in Chinas has been impacted by numerous factors. These factors consist of; low interest rates, increase of bank leading, cheap credit, and high real-estate investments within the population. The government has placed restrictions in the amount of property and individual can purchase. Bank lending “has been tightened to limit developers’ ability to undertake new projects and a new emphasis has been placed on the construction of low-cost housing” (Wheller,...
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