Research goals

Owning an expensive house always signifies success and wealth in China, especially to the young man. That is why the housing bubble issue has been chosen. From the research, the significant housing bubble of Japan and US will be mentioned and compared with Chinese real estate market to analyse whether there has a housing bubble. Two questions of how about the housing bubble in China and what can China learn from the Japan and US after the bubble burst will be solved. Meanwhile, I want to show something special to draw my classmates’ attention to China.

Introduction

In recent years, housing bubble has become a hot topic as it is an important factor in the financial crisis of 2008. The bursting of the housing bubble in America ruined the economy and financial system, as well as leading to a worldwide downturn. According to the definition of Kindleberger(1987), bubble is a long-term rise in the price of assets for expectation on attracting new buyers to invest for profits. With the rising price far higher than the corresponding actual price, one day the bubble will burst with a sharp drop in assets' price.