Essay on Real Estate Crash in China

Submitted By kisscookies
Words: 845
Pages: 4
Open Document
Topic: Real estate crash in China

Name: Cookies
Class: DEC 25 (3)
Subject: writing explanation essay
Date: March 7th, 2013

Commodity prices are constantly changing all over the world especially in countries which are developing rapidly such as China. One of the main variations has been shown at housing market. Carried out by the national bureau statistic, housing prices have raised 7.8 percent in 70% large an medium-sized cities of China. Urbanization is the main contributing factors to the increasing house prices. In addition, both political and economical factors have played a role in this markup. There factors have a number of consequences, and implications for the future.

The premier reason for this phenomenon is that China has step into a quickened urbanization process. A increasing number of skilled and high-educated people from the young generation who are studying and working in the big cities such as Beijing and Shanghai have the strong craving to buy houses and raise new families in these urban areas which are densely populated. This has led to that the new residents want to purchase their house as quickly as possible in case that the price will rise to a level they can not afford. This trend has a devastating impact on house market where the property developers are confidence to keep prices high.

The series of property policies which are carried out in different periods has contributed to the continued increasing price of property. Due to the system of land tenure, the local governments who are behind all the land trades have make a great profit from it. In addition, although the central government has taken steps and tried to regulate the real house market, it seems that the series of policies do not function well but also make situation beyond controlled. Instead of waiting, people who have rigid demand on houses will soon make a decision to purchase their houses because the great anxiety of frequently changed on policies which might result in seriously home-purchase restrictions.

Moreover, economic development in China has triggered price rises for property. Chinese have exponential growth affluence, which means a lot more money will be move from subsistence living cost and holding real estate is becoming a source of financial security. What is more, currency devaluation is oil on the flames which result in that holding the house turns to be their prime investment. This factor has speeded up price rising of houses immediately and has created a property bubble.

Understandably, there is a series of impacts on not only the household level but also the whole economy.

At the beginning, the consequent of increasing houses price might also affect most Chinese families who have the certain cultural beliefs. These beliefs that a man to own a house is considered to be eligible for marriage will be hardly satisfied. In this case, if there are an increasing number of people who cannot afford their house, some unrest social problems come up such as more unstable marriages and children who have divorced parents which will affect their caring insurance and the whole careers. Living like a snail in a small house, the young generation has to rent shabby outdated units and only to find out the huge gap between their dreams and reality. For Chinese, this situation is becoming more
Show More

Related Documents: Essay on Real Estate Crash in China

Case Analysis: Japan's Economic Malaise Essay

While these lending dynamics raised equity and real estate prices, the boom in asset prices and increased leverage fueled consumption, mal- and over-investment, and growth. As the Bank of Japan started raising interest rates in the early 1990s, the elevated equity and real estate prices proved to be unsustainable and eventually the bubbles burst. The 1985 Plaza accord that depreciated the US Dollar versus the…

Words 1750 - Pages 7

Financial Crisis and Stock Market Crash Essay

beginning and often starts following a welcome shock to the macro-economic system. For example the 1980’s Latin American (LA) debt crisis arose out of excess Western bank deposits post the ’73 oil price hike (petro-dollars) whilst the 1987 stock market crash was born out of the market liberalisation known as ‘big bang’ in 1986. This macroeconomic shock/change often fuels an expansion in credit and allows an economy to begin to over-heat. The first fundamental weakness comes when the regulatory system…

Words 3003 - Pages 13

Essay on China: United States and China

the New York Times: “The rise of China will undoubtedly be one of the great dramas of the twenty-first century” (NY) In recent years there has been numerous articles, discussions and commentary as to whether global dominance is shifting from the West to the East, more particularly China and India. There is no doubt that there is a movement to the possibility of global power change from the West to the East when one examines specifically economic indicators. Both China and India in the last 10 years…

Words 3513 - Pages 15

World War Ii Essay

leadership * Effects: freedom of press, speech, religion, freedom of equality French Revolution: * Financial crisis (CAUSE) * Forced new taxes * Many representatives wanted strong reform * 1st and 2nd estates tried to limit 3rd estates * 3rd estate forms the National Assembly * They demanded written constitution and popular sovereignty * Angry mob seized the bastille * NA wrote “declaration of the rights of Man and the citizen” * “Liberty, equality, and…

Words 2022 - Pages 9

Refer To The Article: US Growth Expected Slow Amid Looming Stagflation

economy experienced the worst financial crisis since the great depression. The financial crisis started in the market of housing mortgage loan, especially the so-called “secondary " mortgages, and spread into a loan, to prime mortgages, commercial real estate, corporate junk bonds, and other forms of debt. General American bank losses may be as high as banks half of total capital; this will cause the sharp reduction of bank loans, which in turn may lead to serious economic recession of American economy…

Words 4707 - Pages 19

Essay about Bond Market

disease. Therefore, we need to attempt to find a clear starting point. There must be a fully coherent narrative to explain the financial crisis of 2008, one that we are still reeling from. Some believe that we should start by exploring the crash of 1987, or with the subprime mortgage crisis that led to the housing burst in 2008. However, as others note, the roots of both of these crises stem from the year of 1970 with the transformation of the US Bond Market. In 1970, the bond market changed…

Words 2750 - Pages 11

Advanced Placement Art History Syllabus Essay

Advanced Placement Art History Syllabus Juan Carlos Gonzalez, PhD. Room 5-218 juancg@comast.net juan.gonzalez.1@palmbeachschools.org Grades 9-12 - 1 Year - 1 Credit Prerequisite: Recommendation/Special Permission Course Description: This course is designed to give students the opportunity to discover, appreciate, and acquire knowledge of art history through the ages, from the Paleolithic era to the present. The course involves critical thinking and students will learn to examine and analyze major…

Words 2355 - Pages 10

Essay about International Business

report is as follows: * To introduce the economies of the UK, India and China * UK import and export businesses * The steps of establish the import and export businesses * Analysis of the chosen markets The main option of the report’s beginning is introducing the economies of the UK, India and China. Secondly, the next section analyses the demand for Indian cotton in the UK and for passenger car in China. The third section focuses on the import duty code number and exchange rate…

Words 5485 - Pages 22

Money And Banking Term Papers

debt securities that were more easily handled by the banks. All of this led to a greater number of banks giving loans without doing the proper homework. To make things worse, an influx of liquidity in our nation due to loans from countries like China and India helped the housing market take off; raising the prices of homes to new levels and making the people who took these loans feel even brasher about borrowing money that they did not have. With this new system in place, borrowers began to realize…

Words 3008 - Pages 13

The Great Investors Cliff Notes

(an extremely low buy price or an extremely high selling price). Key to Graham’s investing theory is safety. Early on in his life, Grahams was able to see the downfalls of market speculation when his mother lost everything in the 1907 stock market crash. Therefore, Graham felt it was vital to have a margin of safety in his investments to protect against loss under unfavorable market conditions. Graham stated that a proper margin of safety is attained when the intrinsic value substantially exceeds…

Words 2794 - Pages 12