Should We Be Concerned about the China Bubble?

 

How concerned should we be about The China Bubble? Definitely not as concerned as the possible the bubble in our tech market or the collapsing Euro.

I also think this article lacks merit because a lot of the equity in the China market comes from savings rather than just borrowing. If there really is a China Bubble, as far as our local real estate market is concerned, I see it as a positive. The Chinese are super smart people, have a great handle on what’s going on globally and therefore are very likely to mitigate their risk and spread their eggs further afield than just their local market. That is, they will be more inclined to invest in real estate here in the US.

It makes sense to invest in US real estate. We are close to or at the bottom of our market. Leverage has never been better. Our economy is still the strongest in the world and with a world population at 7B and ever increasing, there is still a premium to Commercial Real Estate.

Could China Property Prices Drop?

According to a Standard Charted Bank research report, signs of a bubble are surfacing in China's selective tier one cities. While the prices are expected to stay firm in these cities, a drop in prices in tier two cities is expected.

China Property Bubble Deflating

According to an article form the Wall Street Journal, China's property bubble has started to deflate. Residential prices are heading down in major cities which has stared to dampen real estate speculation and raises the prospect that the Chinese economy may slow more rapidly than predicted. Real estate has been the foundation of China's growth over the past two decades and its health is crucial to the construction, steel, and cement sectors. It it also a favored investment for people looking to get a better return than a bank deposit.

Chinese Online Retailer 360buy.com Attracts Investors

360buy.com is the biggest business to consumer website in China, so it is no surpirse that this company is attracting big time investors. Most recently Robin Li, founder and CEO of Chinese search engine giant Baidu.com (as well as the richest man in mainland China), has chosen to invest in the growing company. Other investors in 360buy.com include the Walton family, who controls Wal-Mart Stores Inc, and Digital Sky Technologies, the Russia-based internet investment group that owns stakes in Facebook and Groupon. At the end of last month 360buy.com was valued at about $10 billion dollars. Clearly they're doing something right. Post your comments below.

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China: Property Sales Rebound during Labor Day Holiday

Major cities in China experienced a rebound in property sales during the recent Labor Day holiday while prices remained relatively stable. While demand seems to be picking up, it seems as though the trend for the property market during the second half of the year largely hinges on government policies.

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China to designate RMB clearing bank in Singapore

The People's Bank of China is looking to Singapore to internationalize the Renminbi with the goal of facilitating trade between China and southeast Asian countries.

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