Control Of Chinese And Japanese Real Estate Market Bubble By The Monetary Policy

Since the housing system reform in 1998, the marketization process has never stopped while the property price goes up insistently. Although the government has tried many times to control the bubble by issuing limitation policies, the property price still is out of control and keeps increasing accordingly. What happened to Chinese property? How could the extortionate price be controlled? I hope we can find some answers by this paper.The economic environment and property bubble in the 70s and 80s Japan has so much in common with the Chinese bubble right now. For instance, the rocket-growing economy, lower interest rate and high liquidity in a certain period, pressure of local currency exchange rate, etc. This paper begins with the reason and harm of the bubble and then deeply talked about the manner, target and function of the monetary policy tools by comparing with the Japanese bubble, also the time lag of the policy is discussed and compared. The paper finally concludes some successful experiences and suggestions for the control policy.