Problems And Countermeasures Of China's Real Estate Price Bubble

With the innovation of housing system and the upgrading of urbanization level, the real estate industry in China is developing quite fast in terms of both scale and increasing speed recently. It has become one of pillar industry that increases domestic demand and stimulates economic growth. Nonetheless, just as every sword have two sides of blade, rapid-developing also cause some serious problems like high rising price and unbalance of supply and demand system. Because of the influence of the Subprime Crisis from America in 2008, price of housing in China once was a little bit lower than the average. Yet later a set of economic stimulating plans issued by government brought the rapid-developing of Chinese real estate back. All over China the price of house was becoming higher and higher. Since 2010, government has issued a set of policies to control the continuing rising of the house's price, but housing price has kept rising until now. Does the high housing price mean real estate economic is becoming a kind of bubble economic now? What will happen in Chinese social economy if those risky bubbles break? It is an important issue that calls for researches in the course of Chinese economic developing.In the recent 30 years, the breaking of Real estate bubble has caused economic and financial crises many times, and it has become a typical phenomenon in many countries'economic developing. In the early 1990s, the breaking of Real estate "bubble" led to a depression in Japanese economy that lasted for almost 20 years. In 1997, the breaking of Real estate "bubble" caused Hong Kang's housing price to depreciate by half in just one year; those "bad apples" are also the reason of Subprime Crisis in America and Debt Crisis in Dubai. In a word, it has caused social concern because of its high spreading speed and extensive influence. Considering the serious results, people should get some experiences from those typical cases we have talked about above and pay attention to the "bubble" in real estate economy. Proper analysis of the situation and effective policy of Chinese real estate market can help the market developed healthily. It is also significant for the Chinese national economy to develop stably and sustainably.Based on a lot of researches with information and data of "bubble" in the real estate market of both Chinese and the other countries, the author first introduces the definition of real estate "bubble" and talks about the process of bubbles'creation. Secondly, by exponential analysis based on the current situation of Chinese real estate market, the author argues that the "bubble" has already existed in Chinese real estate market since 2009 and shows a tendency of continuing growing. Risk of "bubble" will be more extensive and dangerous without any effective control. Finally, the author analyses the factors of the bubble's creation in Chinese real estate market, like the prediction factor, too much financial support, the driving force of different parties' interests and policy effect. She also introduces the influence of the "bubble" and gives some suggestion with factors of finance, tax and land resource to control and reduce the risk of real estate "bubble".