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Random thoughts about China housing bubble

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All right, now the Chinese regulatory (People’s Bank, China banking regulatory commision, China Securities Regulatory Commission,…) got what they wished for this Christmas: after the cool down of the doemstic stock market, now housing market started take a turn (according to many experts including Vanke CEO Wang Shi). This is reflected in the sharp declining of home builder stocks in China (think Vanke 000002). And in the US, two China real estate ADRs, EJ and XIN, both lost more than 10% today.

I think most people will agree the existence of bubbles in China stock market and housing market. But many of us disagree how big it is; is it causing problem for the real economy (overheating), and introduce unecessary risks? I am not economist and do not pretend to be one. The interesting thing for me, is that the Chinese regulatory took the notes from the melt down of US sub-prime loans, and tried to be one step (or maybe many steps) ahead of the curve. (Below, E-House/EJ office on Changning Rd, Shanghai)


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