Research On Chinese Real Estate Financial Risk's Control And Prevention

In 2007, subprime mortgage crisis surfaced in USA. Later, the credit risk because ofsubprime mortgage crisis eventually evolved into a global financial crisis. In 2010, the UnitedStates quality real estate loans known as the most secure are also large bankrupt. A new roundof excellent credit crisis will hit the United States. People should reflect China's real estatefinancial risks while the world was surfaced from the financial crisis.Real estate is a capital intensive industry, from the allocation of land and real estatedevelopment, to the post of sales, so maintenance requires a lot of financial support. Therefore,the real estate development and sales activities are conducted with the support of financialsector. Real estate finance is irreplaceably important support and protection factors in realestate development. Meanwhile there is the wealth of risk in the real estate finance's operation.When the house prices rises too quickly, the risk of real estate finance will gather. If housingprices begins to "crash", then the property will focus on the outbreak of the financial risk, andthen evolve into a crisis. America's subprime mortgage and excellent credit crisis sounded thealarm.I use the theory of the cause of real estate financial risk to explore the performance andcauses of financial risks in China real estate. I select the real estate financial risk index tomeasure the risk level in the bank's real estate loan of Industrial and Commercial Bank ofChina, Bank of China and other 9 banks. I use the linear regression method to have linearregression for the financial sector loans and real estate loans from 1998 to 2009. I havereached the conclusion that financial sector lending growth too fast is one important factor ofincreasing risk of real estate finance. I use the previous theory on the causes of real estatefinancial risks to have a qualitative analysis on financial risks in China real estate. I believethat improper government action, monetary policy mistakes, the irrational financial markets of the real estate management and structure, credit mechanism defects in financial institutions,housing finance regulations being not sound enough and so on are the important factors of thelead financial risks in China real estate.I analysis the excellent credit crisis of the United States at the present stage, and compareof financial risks in China real estate. I use experience of the control and prevention in the realestate finance risk in the United States, Germany and Singapore. I put forward a proposal ofcontrol and prevention of China's real estate financial risk. Government strengthens thesupervision of the real estate financial market. Pay close attention to macroeconomic changes.Keep a keen financial sense of smell to adjust economic policy. Actively develop real estatefinancial markets and real estate virtuous circle. Banks strengthen the control and preventionof credit risk. Strengthen the financial system. Use a wide range of real estate financingchannels to spread financial risk. Use credit's incentive to control of the risk of non-systemic.Use internal controls to prevent non-systemic risk.