Can Chinese Real Estate Bubble Bring World Economy Down?

Start a Thread Start a Poll All Polls

Can Chinese Real Estate Bubble Bring World Economy Down?
Mar 7, 2013 02:31
JIMMYB Points: Join Date: Feb 7, 2007 Status: offline	Voting without time limit Exclusive Vote 100 vote(s) Yes 114 vote(s) No 93 vote(s) I am unsure. See All Voter(s) Note: Guest voter(s) are not displayed here. On March 1, China issued new regulations on China Real Estate Market. No.1 Impose 20 percent tax on capital gains from home sale No.2 higher down payments and interest rates on second home No.3 new property taxi coming soon Like the previous regulations issued before, the new regulations has the same goal, controlling the housing price and curbing the bubble in case the real estate collapses. Many people believe that there is a huge bubble in the Chinese real estate market. Once the bubble breaks, Chinese real estate will collapse. As a result, Chinese economy will step into recession. Why? The real estate contributes 10 percent to China’s GDP. Yesterday, I watched a short video from CNBC. Two American professors share their opinions on Chinese real estate market. According to Peter Navarro, ‘Death by China’ author, the China real estate bubble will break if China’s economic growth is below 5%. And the direct result is that China will dump cars, steel and other Chinese products into the USA. This will lead into high unemployment rate in the USA and the US economy will be heavily affected. On the other hand, if Chinese economy collapse, Australia, Brazil, Chili, Peru, Canada and other countries that rely too much on the export of commodities will suffer a lot too. However, Ann Lee, a professor from the New York University has different opinion. According to her, China real estate bubbles doesn’t really exist. China has been trying many ways to cool down the real estate market for years including increasing the lending rate and deposit reserve rate. However, the government regulations don’t work well. Why? The demand in the real estate market is too huge. Ann suggests all speculators and investors should sell out their houses before the Chinese real estate market cools down. During the debate, Peter interrupts Ann many times and says some dirty words ‘Shame on you’ to her. Ann even doesn’t have a chance to state her opinion clearly. The hostess at last cuts off the debate. Do you think there is a huge bubble in Chinese real estate market? If so, will the bubble derail the global economy?

Mar 7, 2013 02:31

JIMMYB
Points:
Join Date: Feb 7, 2007
Status: offline

Voting without time limit

See All Voter(s)

Note: Guest voter(s) are not displayed here.

On March 1, China issued new regulations on China Real Estate Market.
No.1 Impose 20 percent tax on capital gains from home sale
No.2 higher down payments and interest rates on second home
No.3 new property taxi coming soon

Like the previous regulations issued before, the new regulations has the same goal, controlling the housing price and curbing the bubble in case the real estate collapses. Many people believe that there is a huge bubble in the Chinese real estate market. Once the bubble breaks, Chinese real estate will collapse. As a result, Chinese economy will step into recession. Why? The real estate contributes 10 percent to China’s GDP.

Yesterday, I watched a short video from CNBC. Two American professors share their opinions on Chinese real estate market.

According to Peter Navarro, ‘Death by China’ author, the China real estate bubble will break if China’s economic growth is below 5%. And the direct result is that China will dump cars, steel and other Chinese products into the USA. This will lead into high unemployment rate in the USA and the US economy will be heavily affected. On the other hand, if Chinese economy collapse, Australia, Brazil, Chili, Peru, Canada and other countries that rely too much on the export of commodities will suffer a lot too.

However, Ann Lee, a professor from the New York University has different opinion. According to her, China real estate bubbles doesn’t really exist. China has been trying many ways to cool down the real estate market for years including increasing the lending rate and deposit reserve rate. However, the government regulations don’t work well. Why? The demand in the real estate market is too huge. Ann suggests all speculators and investors should sell out their houses before the Chinese real estate market cools down.

During the debate, Peter interrupts Ann many times and says some dirty words ‘Shame on you’ to her. Ann even doesn’t have a chance to state her opinion clearly. The hostess at last cuts off the debate.

Do you think there is a huge bubble in Chinese real estate market? If so, will the bubble derail the global economy?

Apr 7, 2013 03:29

VIGORHE
Points:
Join Date: Sep 21, 2009
Status: Offline

Real estate bubble in China has broken out for three years. Inflation all over China has been lasting for many years. Supply and demand for housing, food, home appliances, garments, building materials,etc. sustain unbalanced. Roaring price of housing imposes heavy pressure on low-income earners. The privileged monopolizes major resources in China. Forty percent of suites are empty, which have not been sold out. The investors would not like to reduce the price because they loaned millions of money from the bank.... Speculators make good use of banks to earn profits. China real estate bubble cannot bring global economy down. China relies on labor-intensive industry, while developed nations rely on Hi-Tech one.

May 5, 2013 21:44	#2
JACKLEO Points: Join Date: May 5, 2013 Status: Offline	The impact may be great for those who have a tight relationship with China and are vulnerable beacuse of their economic system. Yet primary countries that support the world's economy, they have healthy and strong resilience, China's impact may be limited.

Aug 6, 2013 09:26

GRIZ326
Points:
Join Date: Jun 12, 2006
Status: Offline

>>>Peter Navarro, ‘Death by China’ author...

This man knows nothing about China. He is a hate monger trying to peddle his book that blames all bad things on China the way Obama blames Bush.

It would not be good for the world if China's economy crashed; the Chinese economy is vital to the global economy. That said, it would not be some sinister, evil, Chinese deed as Mr. Navarro probably implied.

Aug 6, 2013 21:28	#4
JIMMYB Points: Join Date: Feb 7, 2007 Status: Offline	I am not an economist and I don't know many theories. But it seems that there must be something wrong with Chinese economy. The housing price is absurd. I believe that it will go down someday but I don't know when someday comes.

Post a Reply to: Can Chinese Real Estate Bubble Bring World Economy Down?