Research On The Synergy Relationship Between Real Estate Market And Financial Market In China

The real estate market in China has been developing constantly after the reform and opening up policy in China.Due to this reason it has become a part of the national economy in China which is of great importance.Particularly since the 21st century,a variety of real estate industry-related industries have been greatly driven by the rapid development of the real estate market.Meanwhile,the growth rate of the national economy has been enhanced dramatically.As the vast majority of funds in the real estate market is derived from financial institutions.And the commercial banks and other lending institutions in China are also keen to lend money to the real estate market as their investment,making the development of financial credit market in our country greatly promoted.Thus the degree of interdependence and mutual influence between the two markets is much increased.The two indicators that are related to the development of the two markets in the initial years in 20th century have shown upward trend of synergistic growth in the two markets.However,after the financial crisis in 2008,the financial market in China has met a greater volatility.And the real estate industry also got a certain degree of decline because the funding chain supply is limited.Therefore,this thesis studies the causal relationship between the two markets and to see whether there is a consistent co-growth between the two markets.Especially the thesis conducted the break-point analysis in the relationship between the two markets after the financial crisis in 2008,which can show whether the long-term equilibrium relationship and the adjustment relationship between the two markets have changed or not.So it is meaningful and instructive for our government to implement more targeted and effective macroeconomic policies in the two markets.This thesis uses the sales of commercial housing and the credit amount of financial institutions,as their respective indicators.Firstly,the long-term Granger causality relationship between the two markets is studied and the error correction model(ECM)is established to explore the long-term equilibrium relationship and mutual adjustment relationship between the two markets.And the long-term equilibrium relationship between the two markets was tested by the breakpoint of the co-integration to explore whether the long-term equilibrium relationship between the two markets has changed.The study of the interrelationship between the two markets found that there was a two-way Granger causality between the two markets over the long term.But in the short term,the real estate market is the one-way Granger reason to the financial market.And there is indeed synergy between the two markets.At the same time,the long-term equilibrium relationship between the two markets is analyzed and found that after the financial crisis,the adjustment rate of the real estate market to the financial market is obviously smaller,and the adjustment rate of the financial market to the real estate market is changed from the previous reverse adjustment relationship to the same direction t.After the financial crisis in 2008,the development of the two markets still has the characteristics of synergistic increase and decrease.But the interaction between the two markets has undergone significant changes.This also confirms the necessity and importance of the recent policies conducted by our government,particularly the policy of increasing the intensity of the financial control of the real estate market.