CHINA’S PROPERTY: A BUBBLE?

CHINA COULD BE ANOTHER JAPAN

Rising property prices lead to concerns of a similar asset bubble

Jo-Ann Huang Limin

Today Online, February 7, 2011

SINGAPORE - As property prices in China continue to rise - frustrating government efforts to rein them in - some analysts are concerned that China may end up with a Japanese-style asset bubble, which kept growing in the '80s before it burst with painful consequences for the economy.

The analysts noted that China's property market seemed to be fuelled by low interest rates - the same driver that distorted the Japanese market slightly more than two decades ago.

In a recent speech at a National University of Singapore forum, Mr Fan Yifei, executive vice-president of China's sovereign wealth fund China Investment Corporation, drew parallels between the frothy real-estate market in today's China and the real-estate mania that had gripped Japan in the late '80s.

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