When is this bubble in China going to burst?

China's Property Bubble: Can It Be Deflated Safely, or Will It Burst?

China is likely in the midst of a real estate bubble, according to faculty from Wharton and the Guanghua School of Management, who spoke during a joint symposium held at Peking University in Beijing on March 10. “Clearly, in China there are cautionary signs,” said Wharton real estate professor Susan M. Wachter, who also spoke about the fragility of the U.S. market and the need for a new regulatory approach. During his talk, Guanghua finance professor Xinzhong Xu noted, “The more difficult question that nobody can answer is: When is this bubble going to burst?” 

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Can China do the magic and help power the global economy out of a crisis?

Can China help power the global economy out of a crisis? After five years of double-digit expansion, the world’s fastest-growing economy has succumbed to the economic chill wind sweeping across the globe. China’s economy slowed to an annual growth clip of 9 per cent in the third quarter from 10.1 per cent in the previous quarter ­– well below the consensus forecast of 9.7 per cent. With the credit crisis buffeting global economic growth, China’s industrial production and construction declined due to weaker export orders, factory closures for the Beijing Olympics and the sagging property market. However, retail sales growth remained strong, while inflation eased amid falling commodity prices. Nevertheless, Dominic Barton, Asia Pacific chairman of consultancy firm McKinsey & Company, is “very bullish about where China is going to be over the next two to three years.” Speaking at the World Knowledge Forum in Seoul, Barton says that while consensus economic forecasts point to a likely two-percentage point drop in China’s economic growth in 2009, its underlying growth drivers remain formidable ­­– due to its large consumer base, significant infrastructure expenditure and the Chinese government’s strong fiscal position.