China’s property bubble is different than America’s, but that doesn’t make it less dangerous. Real estate is becoming the country’s top economic story overseas

1. Why China's real estate bubble is
different
China’s property bubble is different than America’s, but that doesn’t make it less dangerous. Real estate
is becoming the country’s top economic story overseas. China’s economy is globally important. It is a key
supporter of commodity prices. It is a significant trading partner for several countries, particularly Brazil,
where problems in China can become problems in Rio. No one wants China’s realty to fall in, and no one
actually knows the effects of a China asset bubble, though everyone expects the sudden bursting of that
bubble will be severe.
Over the last some weeks, housing costs in China have been on the mount. Foreign investors in this
space were prudent to purchase the names that have government supporting, are getting awarded big
state contracts, and have a lower cost of capital. The country has 1.4 million people, millions of them
live on less than $2 a day. It needs a stable as well as the strong economy to bring the 20th Century
people.

2. This is a new China now. People are becoming more and more wealthy. Housing is going through the
roof. Big investment banks are purchasing up office space. And the government, and some
property investors, are getting worried.
China’s government possibly deserves some respect on its real estate issue than it is getting. US officials,
such as former Federal Reserve Chairman Alan Greenspan, denied the housing market was overheated
just when housing costs were growing by leaps and bounds.
The commercial property sector is also in hot demand, and despite government efforts to control
lending by rising bank reserve requirements that cuts down the amount of capital they have accessible
to lend, large commercial transactions endure.