China is risking property-market “bubbles” to encourage growth in the world’s third-largest economy, according to former Morgan Stanley Asian economist Andy Xie. “People are looking at the bubbles as a way to gain economic growth in the short term,” Xie said in a Bloomberg Television interview in Hong Kong today. “They are not sure of long-term damages that they may suffer.”
Property sales and values have surged as the government implemented a $585 billion stimulus package and banks extended a record $1.27 trillion of credit. China’s economy expanded 8.9 percent in the third quarter from a year earlier, the statistics bureau said today, while home prices rose at the quickest pace in a year in September, government reports showed last week.
Soho China Ltd., the biggest property developer in Beijing’s central business district, said Oct. 20 that pre-sales will surpass 10 billion yuan ($1.5 billion) for the first time this year “largely” because of the government’s stimulus plan.
“Land prices have become so elevated,” said Xie, who correctly predicted in April 2007 that China’s equities would tumble. “The economy has become so dependent on property and the prices are so high and it carries a lot of risk for the country going forward.”
The country’s cabinet said it will continue with monetary and fiscal stimulus measures even after the economy exceeded officials’ expectations for the first nine months of the year.
Outubro 22, 2009
Olhem aí a próxima “bolha”
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