Study On The Effects Of Real Estate Bubble On The Financial Security In China And Countermeasures

Since China's reformation and opening, by the efforts of our government and people, the economy have developed rapidly which is admired by other countries in the world. However, in recent years, the investment environment is ruined by financial crisis. To ensure the economic growth, Chinese government implements proactive fiscal policies and moderate monetary policies. Under this circumstance, the real estate prices especially in the major cities are soaring which is more than the growth of CPI. Especially in big cities such as Beijing Shanghai and Nanjing, real estate prices rose more than 50%, some even exceeding 100%. In 2009, the government's regulatory policy did not succeed in curbing rapid price rise, and in 2010, the government again implements a more stringent macro-control policy to control house prices, but long-term effect of the policy is still to be verified. Considering after-tax profits, real estate industry is still the fastest growing industry, some middle-side cities such as Hainan are the focus of some institution investors including foreign intuitions. Therefore, China has emerged to some extent real estate bubble phenomenon and there is some important practical significance to make research on how this bubble affecting the financial security of our country.This paper makes deep research on how the real estate bubble affecting the financial security after the financial crisis. The author analyzes the development process of Chinese real estate market and its status , the relationships between real estate market and financial security especially the impacts of real estate bubble on the financial security. In the end, the author puts forward some practical measures to ensure the development of the financial market in China.By deep research, the following conclusions are drew: first, over-reliance on the real estate market is prone to economic fluctuations and leads to instability in financial markets; second, over-supported from financial sector will increase bank risk factors, and even lead to financial crisis; third, the real estate industry plays an important role in national economy, but the scale should be controlled. Meanwhile, we should regulate the financial market and crack down on speculation. Only by coordinating the relations can the economy develop steadily.