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It is highly questionable whether China will be an exception to rule and prevent the real estate bubble from bursting, says an article in China Youth Daily. Excerpts:
Housing prices in many of China's big cities, if measured in foreign exchange rates,casque beats by dre, have increased as much as or even more than that in developed countries. But the average income of people in those Chinese cities lags far behind - at least one-tenth - of those in the developed countries. Despite this sharp contrast,abercrombie, millions of Chinese homebuyers, with different intentions and savings, are still flocking to the housing market.
Will such a bubble remain afloat forever?
Let's look at the lesson we refuse to learn from 2007. Investors then had pinned their hopes on listed companies,casque dr dre, assuming they would sustain the high growth of the stock market and thus prevent it from melting down.
Now,beats by dre, what kind of hypothesis do we have for replenishing the housing bubble?
First,abercrombie and fitch, it seems that a possible devaluation of the yuan could bring down housing prices. But on the contrary, it's the expectation of the yuan's revaluation that has created the housing market bubble.
Second,louboutin pas cher, the transformation of China's economy could make it easier for people to buy a house,louboutin, because once that takes place they are expected to become richer. But actually, it's the high housing prices that are driving the economic transformation.
The success of such transformation depends on three factors: consumption growth,christian louboutin, urbanization and the narrowing of the rich-poor gap. And all these have been dampened by the skyrocketing housing prices.
That leaves us with only hyperinflation,casque beats, which must be ruled out by the policymakers.
Some observers believe the government could gradually relieve the housing and social pressure by accelerating the construction of affordable houses. Or the Chinese mainland could follow the Hong Kong model of offering expensive villas and apartments to the rich and affordable houses to the poor. But even Hong Kong's real estate market couldn't escape a bubble, which threatened the entire economy of the special administrative region when it burst.
Hong Kong's policy has widened the local rich-poor gap, too.
The bursting of housing bubbles in Japan, the US and Dubai has caused regional or international economic crises. That's precisely why China's housing bubble has attracted so much attention.
(China Daily 12/17/2009 page9)
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