Chinese Real Estate Bubble

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Chinese Real Estate Bubble

By | April 2013
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China has been one of the biggest economies in the world. One of the main reasons for quick economy development is real estate. In China, the real estate price had been increasing rapidly from 2000 to 2010, and the price is even 4 times higher than before. The reason for increasing real estate price is demand increasing. After that, so many real estate manufacturers invest much money on the real estate in order to get higher return based on the increasing demand.

From the government perspective: Today, we discuss the global crisis and we compare the European Crisis and US Crisis. Basically, I think European Crisis is from the Greece because Greece was the host country of Olympic Games and Greece has no money to pay for debt so that Greece has to lend money from European Union. After that, debt crisis appeared in the almost whole Europe. Because European Debt Crisis and US Subprime Crisis, China has been also suffered during the global financial crisis. Real Estate is the major source of national income and it is kind of risky. For the government, they have to minimize the impact of global crisis to the China and our central government decides to restrict the real estate.

From Chinese citizens, there are still a lot of conflicts among different class people, such as employment conflict, unbalance wealth conflict. Although the total averaged Chinese salary is high enough but the majority of people are still unable to buy their houses. Decreasing the real estate price which belongs to domestic call becomes much greater than before.

Because of global crisis and Chinese citizens’ calls, the government starts to restrict the real estate. On the other hand, most real estate manufacturers have wrong predictions about the China real estate. That is why China has real estate bubble in the early period of time.

Recently, the global financial situation becomes better than before and China almost recovered from the global crisis but the economy development is not...
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