Firstly, we can clearly see that the outside economic environment of both this period China and last centre of Japan is very similar. As both countries all have the loose monetary policy and prudent fiscal policy. Those two countries all have high savings followed with low rate pf consumption. Furthermore, the economic performances (as severe real estate bubble, the economy is too rely on exportation, upward pressure of currency, and so on) in china, are almost the same as the situation in Japan in 1980s when the bubble was not burst.
However, I still believe China won't repeat the same trend as Japan. This is because the financial system in China is obviously different as it in USA, Japan or even Hong Kong. Under Chinese financial system, the central bank has more controlling force to control the real estate loan, which is helpful to against the moral hazard and domino effects. Moreover, the Chinese government has effective measures to guide and regulate both banks and real estate agencies and this will significantly help Chinese real estate market back to the healthy development track. Finally, the market breadth and population structure of both countries are different. The urbanization level of Japan in 1985 is 76.7%, and it in China just around 45% in 2008 (data is from National Bureau of Statistics of China). This is means Chinese real estate industry still has large development space and growth potential which will give the real estate industry a strong support.
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