China's Real Estate Shaky?

http://www.nytimes.com/2011/11/11/business/global/government-policies-cool-china-real-estate-boom.html

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"Most people are more satisfied with old problems then committed to finding new solutions" (John C. Maxwell)

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There are people who have predicted that China's real estate "bubble" will burst and with it, the Chinese economy.

Whether that's true or not, the New York Times report this week that ads have grown on the Internet for unfinished apartments at up to 28% off the price at which developers were selling them a few months ago, is worthy of note. China's government wants to deflate the bubble without causing a crash and has implemented policies like pushing up interest rates and setting limits on bank lending that will slow inflation and inhibit speculators' efforts to borrow money.

As the Times points out, Premier Wen Jiabao said Sunday that the government had no intention of letting up on these policies until prices fall to a more reasonable level.

Economists at Barclays Capital suggested in a research note on Tuesday that the Chinese government might start reversing policies if the fall in real estate prices reaches 20%.

We'll see.