(A) study on China's current real estate cycle and potential financial risks

다국어 초록 (Multilingual Abstract)

A Study on China’s Current Real Estate Cycle and Potential Financial Risks

Chao Gao
Department of International Economics & Law
Graduate School
Hankuk University of Foreign Studies

The real estate cycle and financial stability are closely correlated. In light of global real estate bubbles, China’s real estate cycle has attracted wide attention since 1998. The present paper analyzes three driving factors in the context of the current real estate cycle; namely, economic growth, macroeconomic environment and institutional establishment. Supported by econometric analysis using quarterly data from 1992-2004, the present paper indicates that real estate will develop steadily and that housing prices will consistently rise in the relative long run. Based on quantitative analysis, it is concluded that the implications of the current real estate cycle for financial stability include risks of real estate credit exposure, government guarantees and maturity mismatch. Some corresponding policy implications are discussed, such as advancing banking reform, encouraging the rational behavior of local governments and strengthening the regulation of foreign capital flows in and out of China’s real estate industry.

목차 (Table of Contents)

• Chapter 1 Introduction 1
• Chapter 2 Chinese Real Estate Market : Trend and Outlook 8
• 1. China real estate: current status 8
• 2. Main issues facing institutional investor 10
• 3. Market outlook 14
• Chapter 3 New Rules for Real Estate Industries 17
• 1. Existing accounting treatment in the real estate industry 18
• 2. The promulgation of new standards and applications
• for real estate enterprises 24
• Chapter 4 China Real Estate Finance 34
• 1. What is real estate finance ? 34
• 2. The history of China's real estate finance 36
• 3. Real estate and financial industries 37
• 4. The reasons of the fincial industries support for real estate 40
• 5. China's Finance industries and Banking System 42
• Chapter 5 Potential Financial Risk 49
• 1. China's real estate crisis and the risks to growth 49
• 2. China's public housing system 60
• Chapter 6 Conclusion 67
• References 69
• Abstract 74