It seems that the real estate bubble is about to burst in China as Chinese Academy of Social Sciences, one of the top research bodies has warned that China should increase its interest rates and prevent its real estate sector from heating up.
If this is not done then China may face the same situation as Japan faced during the early 90s. If China increases domestic demand on the price then retail estate bubble is quite imminent in the country. China should learn from the mistakes which Japan committed in the 80s where the low interest rates in the country caused the domestic demand to rise to such an extent that it lead to a very big real estate bubble for their economy.
The situation in the current economy of China is looking similar to that of Japan in the 80s as we can see that though the property prices have rocketed in China but inflation is still not rising in the country.
The situation looks quite grim in China and if the leaders of the country don’t come up with a solution soon they then they would be repeating the Japanese history in their country.
Via englishpeople
