Big property bubble forming in China, warns leading developer
Financial Times UK
By Jamil Anderlini in Beijing
http://www.ft.com/cms/s/0/bcf0ced2-d4ab-11de-a935-00144feabdc0.html
Published: November 19 2009 02:00 | Last updated:
November 19 2009 02:00
A large bubble is forming in China's property market as a result of Beijing's credit-driven stimulus programme, one of the country's most prominent real estate developers warned.
Zhang Xin, chief executive of Soho China, one of the country's most successful privately-owned property developers, told the Financial Times the asset bubble was leading to rampant wasteful investment in the sector, undermining the country's long-term growth prospects.
"Real estate prices should only go up because people want to actually use the space, but at the moment we can see more and more empty buildings across the whole country and in every real estate segment," Ms Zhang said. "The rising prices are a direct result of so much money coming from the banks and the Chinese banks should be very worried."
Ms Zhang's assessment was echoed by Fan Gang, a member of the central bank's monetary policy committee, who warned yesterday that real estate in cities such as Beijing, Shanghai and Shenzhen was expensive and there was a growing risk of asset price bubbles.
China is now on the same bubble path as Japan post-1987 crash
This article by Peter Tasker, a well-regarded financial analyst in Asia, comes via the Financial Times (hat tip Marshall). He sees an enormous bubble forming in China – and parallels to Japan circa 1987:
To anyone who has lived through the rise and fall of the Japanese bubble economy, it should set off alarm bells.
Remember that it was in the years following the 1987 "Black Monday" crash that Japanese assets went from being expensive to absurdly overvalued and the Nikkei’s dizzy rise to 39,000 forced the bears to throw in the towel…
But what you saw was decidedly not what you got. The crisis, far from leaving Japan unscathed, exacerbated its structural problems and laid the groundwork for a far greater disaster…
Financial Times UK
By Jamil Anderlini in Beijing
http://www.ft.com/cms/s/0/bcf0ced2-d4ab-11de-a935-00144feabdc0.html
Published: November 19 2009 02:00 | Last updated:
November 19 2009 02:00
A large bubble is forming in China's property market as a result of Beijing's credit-driven stimulus programme, one of the country's most prominent real estate developers warned.
Zhang Xin, chief executive of Soho China, one of the country's most successful privately-owned property developers, told the Financial Times the asset bubble was leading to rampant wasteful investment in the sector, undermining the country's long-term growth prospects.
"Real estate prices should only go up because people want to actually use the space, but at the moment we can see more and more empty buildings across the whole country and in every real estate segment," Ms Zhang said. "The rising prices are a direct result of so much money coming from the banks and the Chinese banks should be very worried."
Ms Zhang's assessment was echoed by Fan Gang, a member of the central bank's monetary policy committee, who warned yesterday that real estate in cities such as Beijing, Shanghai and Shenzhen was expensive and there was a growing risk of asset price bubbles.
China is now on the same bubble path as Japan post-1987 crash
This article by Peter Tasker, a well-regarded financial analyst in Asia, comes via the Financial Times (hat tip Marshall). He sees an enormous bubble forming in China – and parallels to Japan circa 1987:
To anyone who has lived through the rise and fall of the Japanese bubble economy, it should set off alarm bells.
Remember that it was in the years following the 1987 "Black Monday" crash that Japanese assets went from being expensive to absurdly overvalued and the Nikkei’s dizzy rise to 39,000 forced the bears to throw in the towel…
But what you saw was decidedly not what you got. The crisis, far from leaving Japan unscathed, exacerbated its structural problems and laid the groundwork for a far greater disaster…
